Reddit Investors Have Opportunity to Lead Securities Fraud Lawsuit

Reddit, Inc. investors who suffered losses can lead a securities fraud class action lawsuit. The complaint alleges that between October 29, 2024 and May 20, 2025, defendants failed to disclose changes in Google Search's algorithm and features that caused users to stop querying on Google Search, leading to reduced traffic to Reddit. Investors who wish to participate must contact The Law Offices of Frank R. Cruz by August 18, 2025.

Reddit, Inc. (RDDT) investors who suffered losses have an opportunity to lead a securities fraud class action lawsuit. The complaint, filed by The Law Offices of Frank R. Cruz, alleges that between October 29, 2024 and May 20, 2025, Reddit and its officers failed to disclose material changes in Google Search's algorithm and features that caused users to stop querying on Google Search, leading to reduced traffic to Reddit [2]. Investors who wish to participate must contact The Law Offices of Frank R. Cruz by August 18, 2025.

The lawsuit alleges that Reddit's failure to disclose these changes was materially misleading and lacked a reasonable basis. Specifically, the complaint states that Reddit was aware that the increase in the query term "Reddit" on search engines was due to users getting their answers from Google Search without visiting Reddit. This "zero-click search" reality dramatically reduced traffic to Reddit, making the company's outlook on user rates and advertising revenues inaccurate [2].

Reddit's stock price has been volatile due to these algorithm changes. On May 2, 2025, Reddit's stock price fell $4.96 per share after reporting its financial results for the first quarter of 2025, which showed declining daily active user growth. Further downgrades from Wells Fargo and Baird analysts on May 19 and May 21, 2025, respectively, citing concerns about Google Search's expanded AI capabilities, led to additional stock price declines [1].

Reddit's second-quarter revenue grew 78% to $500 million, driven by digital advertising and AI growth, but the company noted challenges with traffic from Google Search [3]. The lawsuit alleges that these challenges were not adequately disclosed to investors, potentially misleading them about the company's prospects.

Investors who purchased or otherwise acquired Reddit securities during the class period are encouraged to contact The Law Offices of Frank R. Cruz to learn more about the lawsuit and their rights. The firm can be reached via email at [email address] or by phone at [phone number] [2].

References:
[1] https://www.morningstar.com/news/globe-newswire/9505632/investor-alert-pomerantz-law-firm-reminds-investors-with-losses-on-their-investment-in-reddit-inc-of-class-action-lawsuit-and-upcoming-deadlines-rddt
[2] https://www.prnewswire.com/news-releases/reddit-inc-rddt-investors-who-lost-money-have-opportunity-to-lead-securities-fraud-lawsuit-302521533.html
[3] https://www.storyboard18.com/advertising/reddits-q2-revenue-jumps-to-500-mn-driven-by-digital-ad-and-ai-growth-78035.htm