Core Viewpoint - A class action lawsuit has been filed against Reddit, Inc. for alleged misleading statements regarding user traffic and advertising revenue, particularly in relation to changes in Google Search's algorithm and AI features [1][3]. Group 1: Lawsuit Details - The class action lawsuit covers individuals who purchased Reddit securities between October 29, 2024, and May 20, 2025, with a deadline of August 18, 2025, for investors to apply as lead plaintiffs [1]. - The lawsuit claims that Reddit's management failed to disclose the impact of Google Search's algorithm changes on user traffic, which led to a significant decline in daily active user growth [3][4]. Group 2: Financial Impact - Following the earnings release on May 1, 2025, Reddit's stock price fell by $4.96, or 4.2%, from $118.79 to $113.83 per share due to three consecutive quarters of deceleration in user growth [4]. - On May 19, 2025, Wells Fargo downgraded Reddit's stock, reducing the price target from $168 to $115 per share, which resulted in a further decline of $5.24, or 4.6%, in stock price [5]. - Baird analysts also downgraded Reddit's stock on May 21, 2025, lowering the price target from $140 to $120 per share, leading to a drop of $9.79, or 9.3%, in stock price [6][7].

Core Viewpoint - A class action lawsuit has been filed against Reddit, Inc. for alleged securities fraud, impacting investors who purchased Reddit securities between October 29, 2024, and May 20, 2025 [1] Company Performance - Reddit's primary revenue source is advertising, and it has been experiencing a decline in user traffic due to changes in Google Search's algorithm, particularly the introduction of AI features [4] - The company reported three consecutive quarters of deceleration in daily active user growth, leading to a significant drop in stock price following the earnings release on May 1, 2025 [6] Stock Price Movements - Following the earnings announcement on May 1, 2025, Reddit's stock fell by $4.96, or 4.2%, from $118.79 to $113.83 [6] - On May 19, 2025, Wells Fargo analysts downgraded Reddit's stock, resulting in a further decline of $5.24, or 4.6%, from $113.23 to $107.99 [7] - Baird analysts also downgraded Reddit's stock on May 21, 2025, causing a drop of $9.79, or 9.3%, from $105.64 to $95.85 [8][9] Legal Proceedings - The lawsuit alleges that Reddit's management made false and misleading statements regarding user traffic and advertising revenue, failing to disclose the impact of Google Search's algorithm changes [5] - Investors affected by the alleged fraud have until August 18, 2025, to request to be appointed as lead plaintiff in the class action [9]