Reddit, Inc. (NYSE: RDDT): Reddit, Inc. (“Reddit” or the “Company”) and certain of the Company’s senior executives have been sued for violations of the federal securities laws. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in Reddit securities. The case is pending in the U.S. District Court for the Northern District of California and is captioned Tamraz, Jr. v. Reddit, Inc., at al., No. 25-cv-05144.
If you incurred losses on your investments in Reddit, you are encouraged to submit your information.
Why Was Reddit Sued for Securities Fraud?
Reddit owns and operates the eponymous social news aggregation, forum, and social media platform. Reddit receives a significant portion of its user traffic from individuals seeking answers to questions using Google Search. The complaint alleges that Reddit misrepresented and downplayed the impact that Google’s use of Artificial Intelligence (“AI”) technology in Google's search results had on Reddit’s user growth.
In truth, Google’s use of AI dented Reddit’s user growth by eliminating the need for individuals to visit and click through to Reddit to get answers to their questions. Rather, the answers appeared through Google’s AI search results.
The Stock Declines as the Truth Is Revealed
On May 1, 2025, Reddit reported a significant slowdown in daily active user growth. On this news, the price of Reddit stock declined $4.96 per share, or more than 4%, from $118.79 per share on May 1, 2025, to $113.83 per share on May 2, 2025.
Next, on May 19, 2025, Wells Fargo analysts downgraded Reddit stock, noting that Google’s implementation of AI features into Google Search would likely cause “permanent” disruptions to Reddit’s user traffic and that traffic to Reddit from Google Search was likely to decline. On this news, the price of Reddit stock fell $5.24 per share, or more than 4.5%, from $113.23 per share on May 16, 2025, to $107.99 per share on May 19, 2025.
Then, on May 21, 2025, Baird analysts downgraded Reddit stock, citing concerns that Google’s AI capabilities are stifling Reddit’s user growth. On this news, the price of Reddit stock fell $9.79 per share, or over 9%, from $105.64 per share on May 20, 2025, to $95.85 per share on May 21, 2025.
What Are My Rights?
If you purchased or otherwise acquired Reddit securities, you may ask the Court no later than August 18, 2025, which is the first business day after 60 days from the date of the publication of notice of pendency of the action, to appoint you as Lead Plaintiff through counsel of your choice. To be a member of the Class, you need not take any action at this time. The ability to share in any potential future recovery is not dependent on serving as Lead Plaintiff.
Contact Us
If you incurred losses on your investments in Reddit, you are encouraged to submit your information using the form on this page to speak with an attorney about your rights.
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212.789.3619
All representation is on a contingency fee basis. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses.
Why Bleichmar Fonti & Auld LLP?
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It has been named a top plaintiff law firm by Chambers USA, The Legal 500, and ISS SCAS, and its attorneys have been named “Elite Trial Lawyers” by the National Law Journal, “Leading Plaintiff Financial Lawyers” by Lawdragon, “Titans of the Plaintiffs’ Bar” by Law360 and “SuperLawyers” by Thomson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors, as well as $420 million from Teva Pharmaceutical Ind. Ltd.
Attorney advertising. Past results do not guarantee future outcomes.
