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Reddit Lawsuit Filed Over Securities Violations During Class Period
ByAinvest
Monday, Jul 14, 2025 9:33 am ET1min read
The Schall Law Firm is reminding investors of a class action lawsuit against Reddit, Inc. for alleged violations of securities laws. Investors who purchased the company's securities between October 29, 2024 and May 20, 2025 are encouraged to contact the firm before August 18, 2025 to discuss their rights.
July 2, 2025The Schall Law Firm has issued a reminder to investors about a class action lawsuit against Reddit, Inc. (NYSE: RDDT) for alleged violations of securities laws. The lawsuit, pending in the U.S. District Court for the Northern District of California, is captioned Tamraz, Jr. v. Reddit, Inc., et al., No. 25-cv-05144.
Investors who purchased Reddit securities between October 29, 2024, and May 20, 2025, are encouraged to contact the firm before August 18, 2025, to discuss their rights. The complaint alleges that Reddit misrepresented and downplayed the impact of Google's use of Artificial Intelligence (AI) technology in search results on Reddit's user growth. In reality, Google's AI capabilities reduced user traffic to Reddit by providing answers directly through search results, rather than directing users to the platform [1].
The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors who purchased Reddit securities. The complaint alleges that Reddit made materially false and misleading statements regarding its user growth and the impact of Google's AI technology. This misrepresentation led to a significant slowdown in daily active user growth and a decline in the stock price. On May 1, 2025, Reddit's stock price fell by $4.96 per share, or more than 4%, following the announcement of the slowdown in user growth. Subsequently, on May 21, 2025, Wall Street analyst Baird cut its Reddit stock price target, causing the stock to fall by $9.79 per share, or over 9% [2].
Investors are advised to register for the class action before the August 18, 2025, deadline. The Schall Law Firm emphasizes that there is no cost or obligation to participate in the case. The firm will provide status updates throughout the lifecycle of the case.
References:
[1] https://www.morningstar.com/news/globe-newswire/9493262/rddt-fraud-class-action-reddit-inc-investors-may-have-been-affected-by-fraud-contact-bfa-law-by-august-18-legal-deadline-nyserddt
[2] https://www.globenewswire.com/news-release/2025/07/14/3114757/0/en/RDDT-FRAUD-CLASS-ACTION-Reddit-Inc-Investors-may-have-been-Affected-by-Fraud-Contact-BFA-Law-by-August-18-Legal-Deadline-NYSE-RDDT.html
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