Law Offices of Howard G. Smith Encourages Reddit, Inc. (RDDT) Investors To Inquire About Securities Fraud Class Action

BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Reddit, Inc. (“Reddit” or the “Company”) (NYSE: RDDT) securities between October 29, 2024 and May 20, 2025, inclusive (the “Class Period”). Reddit investors have until August 18, 2025 to file a lead plaintiff motion.

IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN REDDIT, INC. (RDDT), CONTACT THE LAW OFFICES OF HOWARD G. SMITH TO PARTICIPATE IN THE ONGOING SECURITIES FRAUD LAWSUIT.

Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at [e-mail], by telephone at [phone] or visit our website at www.howardsmithlaw.com.

What Happened?

On May 1, 2025, after market hours, Reddit released its first quarter 2025 financial results, marking a third consecutive quarter with slowdown in daily active user growth. On this news, Reddit’s stock price fell $4.96, or 4.2%, to close at $113.83 per share on May 2, 2025, thereby injuring investors.

Then, on May 19, 2025, Wells Fargo analysts downgraded Reddit’s stock, stating that Google’s AI features would likely cause “permanent” disruptions to user traffic for Reddit, and that traffic to Reddit from Google Search would continue to decline and ultimately hurt Reddit’s advertising revenue. On this news, Reddit’s stock price fell $5.24, or 4.6%, to close at $107.99 per share on May 19, 2025.

Then, on May 21, 2025, Baird analysts downgraded Reddit’s stock, citing similar concerns as Wells Fargo. On this news, Reddit’s stock price fell $9.79, or 9.3%, to close at $95.85 per share on May 21, 2025, thereby injuring investors further.

What Is The Lawsuit About?

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) changes in Google Search’s algorithm and features like AI Overview were causing users to stop their query on Google Search; (2) these algorithm changes were materially different than prior instances of reduced traffic to the Reddit website; (3) Defendants were aware that the increase in the query term “Reddit” on search engines was because users were getting the sought after answer from Google Search without having to go to Reddit, and not because they intended to visit Reddit; (4) this zero-click search reality was dramatically reducing traffic to Reddit in a manner the Company was unable to overcome in the short term; (5) Defendants, therefore, lacked a reasonable basis for their outlook on user rates and advertising revenues; and (6) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.

Contact Us To Participate or Learn More:

If you purchased Reddit securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Law Offices of Howard G. Smith
3070 Bristol Pike, Suite 112
Bensalem, Pennsylvania 19020
Telephone: [phone]
Email: [e-mail]
Visit our website at: www.howardsmithlaw.com.

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