FMP
Reddit, Inc. (NYSE:RDDT) Faces Legal Scrutiny Amid Stock Volatility
May 28, 2025 6:00 PM - Alex Lavoie
Image credit: Google Images
- Levi & Korsinsky investigates Reddit, Inc. (NYSE:RDDT) for potential federal securities law violations following a significant price target reduction by Baird.
- Advanced AI capabilities from tech giants pose a threat to Reddit's user growth, impacting its stock price.
- Insider activity and market volatility highlighted by the sale of shares by Reddit's Chief Accounting Officer after a notable stock price drop.
Reddit, Inc. (NYSE:RDDT) is under scrutiny by Levi & Korsinsky for potential violations of federal securities laws. This investigation follows a significant event on May 21, 2024, when Baird reduced its price target for Reddit from $140 to $120. Concerns arose over the impact of advanced AI capabilities from tech giants like Alphabet, which could threaten Reddit's user growth and site traffic.
The platform's primary use for obtaining answers to user questions is now being challenged by Google's new AI tool, which offers solutions with fewer clicks. This development led to a notable drop in Reddit's stock price, which fell by over 9%, closing at $95.85 per share on May 21, 2025. Levi & Korsinsky, a prominent securities litigation firm, is known for securing substantial settlements for shareholders.
On May 22, 2025, Reynolds Michelle Marie, Reddit's Chief Accounting Officer, sold 300 shares of Class A Common Stock at $96.71 each. After this transaction, she retains 44,706 shares. This sale occurred shortly after the stock's decline, raising questions about insider activity during a period of market volatility.
Currently, Reddit's stock price is $105.64, reflecting a slight increase of approximately 0.97% or $1.02. The stock has fluctuated between $103.16 and $106.71 today. Over the past year, Reddit's stock has seen a high of $230.41 and a low of $49.13, indicating significant volatility in its market performance.
Reddit's market capitalization is approximately $19.49 billion, with a trading volume of 3,063,466 shares on the NYSE. This reflects the company's substantial presence in the market, despite recent challenges and the ongoing investigation by Levi & Korsinsky.
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