Reddit Shares Rise 1.71% Despite 85th Volume Rank as Legal Action Over Google's Zero-Click Searches Intensifies

On August 8, 2025, Reddit (RDDT) closed with a 1.71% gain, trading on a volume of $1.02 billion, a 20.75% decline from the prior day’s activity. The stock ranked 85th in market volume, reflecting mixed short-term investor sentiment.

A pending securities fraud class action lawsuit has drawn attention to Reddit’s business practices. The lawsuit alleges that between October 2024 and May 2025, the company failed to disclose material risks tied to Google Search’s algorithm changes. Specifically, the complaint claims that zero-click searches—where users receive answers directly on Google’s search page—significantly reduced Reddit’s traffic. This, it argues, undermined the company’s ability to maintain user growth and advertising revenue, rendering its public statements misleading.

The legal action highlights broader challenges for Reddit in adapting to evolving search engine dynamics. With users increasingly relying on AI-driven summaries to avoid visiting external sites, the platform faces structural headwinds. Investors are now scrutinizing whether management adequately addressed these risks in its disclosures, which could impact long-term confidence in the business model.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets.