Reddit Shares Drop 30% Following Weak Fourth-Quarter Sales Guidance
Reddit (RDDT) shares plummeted approximately 30% on Friday, marking its steepest single-day decline since its 2024 IPO. The sell-off was triggered by the company's third-quarter earnings report, which included fourth-quarter revenue guidance of $1 billion to $1.03 billion—falling short of Wall Street's $1.05 billion consensus. CEO Steve Huffman attributed a meaningful decline in search-referral traffic to the rise of Google's AI Overviews. In response to shifting web dynamics, Reddit announced plans to test requiring user logins to access content, a move intended to protect its ecosystem but one that analysts warn could create uncertainty regarding user growth and monetization.
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Topics: AI impact on search traffic earnings report revenue guidance stock price decline user authentication policy