Reddit, Inc. Class Action Lawsuit - RDDT
Case Summary
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The Reddit class action lawsuit seeks to represent purchasers or acquirers of Reddit, Inc. (NYSE: RDDT) securities between October 29, 2024 and May 20, 2025, inclusive (the “Class Period”). Captioned Tamraz v. Reddit, Inc., No. 25-cv-05144 (N.D. Cal.), the Reddit class action lawsuit charges Reddit and certain of Reddit’s top executives with violations of the Securities Exchange Act of 1934.
If you suffered substantial losses and wish to serve as lead plaintiff of the Reddit class action lawsuit, please provide your information in the form on this page. You can also contact attorney J.C. Sanchez or Jennifer N. Caringal of Robbins Geller by calling 800/449-4900 or via e-mail at info@rgrdlaw.com. Lead plaintiff motions for the Reddit class action lawsuit must be filed with the court no later than August 18, 2025.
CASE ALLEGATIONS: Reddit operates a digital community.
The Reddit class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) changes in Google Search’s algorithm and features like AI Overview were causing users to stop their query on Google Search; (ii) these algorithm changes were materially different than prior instances of reduced traffic to the Reddit website; (iii) 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; (iv) this zero-click search reality was dramatically reducing traffic to Reddit in a manner Reddit was unable to overcome in the short term; and (v) defendants, therefore, lacked a reasonable basis for their outlook on user rates and advertising revenues.
The Reddit class action lawsuit alleges that on May 1, 2025 Reddit announced first quarter 2025 financial results, revealing Reddit’s third consecutive quarter experiencing a slowdown in daily active user growth. On this news, the price of Reddit stock fell, according to the complaint.
Then, on May 19, 2025, Wells Fargo analysts downgraded Reddit’s stock and lowered their price target to $115 per share, noting that Google Search’s implementation of new AI features as likely “permanent” disruptions on user traffic for Reddit, ultimately hurting Reddit’s advertising revenue. On this news, the price of Reddit stock fell further, according to the complaint.
Finally, the Reddit class action lawsuit alleges that on May 21, 2025, Baird analysts downgraded Reddit’s stock and reduced its price target to $120, noting that with confirmation on permanent disruptions to Reddit’s traffic, they “[a]djust[ed] estimates for ongoing U.S. user growth headwinds.” On this news, the price of Reddit stock fell more than 9%, according to the complaint.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired Reddit securities during the Class Period to seek appointment as lead plaintiff in the Reddit class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Reddit class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Reddit class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the Reddit class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities fraud and shareholder litigation. Our Firm has been ranked #1 in the ISS Securities Class Action Services rankings for four out of the last five years for securing the most monetary relief for investors. In 2024, we recovered over $2.5 billion for investors in securities-related class action cases – more than the next five law firms combined, according to ISS. With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world, and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest ever – $7.2 billion – in In re Enron Corp. Sec. Litig.