Investors can contact the law firm at no cost to learn more about recovering their losses
LOS ANGELES, June 26, 2025 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Reddit, Inc. (“Reddit” or the “Company”) (NYSE: RDDT) investors of a class action representing investors that bought 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.
Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: lesley@portnoylaw.com, to discuss their legal rights, or click here to join the case. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.
CASE ALLEGATIONS: Reddit is a digital platform that hosts user-generated content and online communities.
According to the class action lawsuit, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose material information, including that:
(i) changes to Google Search’s algorithm—particularly the introduction of features such as AI Overview—were significantly reducing user click-throughs to Reddit by satisfying user queries directly on Google;
(ii) these changes differed substantially from previous declines in Reddit’s web traffic;
(iii) defendants were aware that the increased use of the search term “Reddit” did not reflect genuine user intent to visit the site, but rather that users were obtaining their answers directly from Google without needing to click through (“zero-click” searches);
(iv) this shift was causing a significant drop in traffic that Reddit could not quickly offset; and
(v) as a result, Reddit’s guidance regarding user growth and advertising revenue lacked a reasonable basis.
The Complaint further alleges that on May 1, 2025, Reddit reported its Q1 2025 financial results, disclosing a third consecutive quarter of slowing daily active user growth. Following this announcement, Reddit’s stock price declined.
On May 19, 2025, Wells Fargo analysts downgraded Reddit’s stock and lowered their price target to $115, citing Google's AI features as a likely “permanent” disruption to Reddit’s user traffic and a threat to advertising revenue. Reddit’s stock dropped again on this news.
Then, on May 21, 2025, Baird analysts also downgraded Reddit’s stock and cut their price target to $120, stating that confirmation of lasting traffic disruptions led them to revise their projections due to “ongoing U.S. user growth headwinds.” On this news, Reddit’s stock declined by over 9%, according to the Complaint.
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The Portnoy Law Firm represents investors in pursuing claims against caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.
Lesley F. Portnoy, Esq.
Admitted CA and NY Bar
lesley@portnoylaw.com
310-692-8883
www.portnoylaw.com
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