Reddit, Inc. Investors: Class Action Lawsuit Filed Over Alleged Securities Fraud

Reddit shareholders who lost money between October 29, 2024, and May 20, 2025, may be eligible to participate in a class action lawsuit. The lawsuit alleges that the company made false statements and concealed changes in Google Search algorithms and features that caused users to stop using the Reddit website. Shareholders have until August 18, 2025, to request lead plaintiff status and may be eligible for compensation without paying out-of-pocket costs or fees.

Reddit shareholders who lost money between October 29, 2024, and May 20, 2025, may be eligible to participate in a class action lawsuit. The lawsuit alleges that the company made false statements and concealed changes in Google Search algorithms and features that caused users to stop using the Reddit website. Shareholders have until August 18, 2025, to request lead plaintiff status and may be eligible for compensation without paying out-of-pocket costs or fees [1].

The class action lawsuit was filed by Pomerantz LLP on behalf of investors who purchased Reddit securities during the class period. The complaint alleges that Reddit and its officers and directors engaged in securities fraud or other unlawful business practices by not disclosing material changes in Google Search algorithms and features. These changes, such as AI Overview, were causing users to stop their queries on Google Search, leading to a significant reduction in traffic to Reddit [1].

The lawsuit also alleges that Reddit's public statements about user growth and advertising revenues were materially false and misleading. The complaint notes that the company was aware of the zero-click search reality, where users were getting the sought-after answers from Google Search without visiting Reddit, but failed to disclose this information to investors [1].

Reddit's stock price has been volatile in recent months, with significant declines following the release of its financial results and analyst downgrades. On May 1, 2025, Reddit reported its third consecutive quarter of declining daily active user growth, leading to a $4.96 per share drop in its stock price [1]. Wells Fargo and Baird analysts subsequently downgraded Reddit's stock, citing concerns about the impact of Google Search's expanded AI capabilities on user growth [1].

Shareholders who wish to participate in the class action lawsuit should contact Danielle Peyton at Pomerantz LLP or visit the firm's website for more information. The deadline to request lead plaintiff status is August 18, 2025 [1].

References:

[1] https://www.marketscreener.com/quote/stock/REDDIT-INC-167442757/news/Pomerantz-Law-Firm-Reminds-Investors-with-Losses-on-their-Investment-in-Reddit-Inc-of-Class-Action-50450409/