Reddit Slides 19% as Search Traffic Drop Threatens Q4 User Growth
RDDT is trading near its 52-week low of $119.27 (15% below the low) on elevated volume (3.2× avg).
Summary
Reddit's Q3 beat (revenue $895M, +53%; EPS $1.40 vs $1.36) is being overwhelmed by a weak Q4 guide of $1.00B-$1.03B versus the $1.046B consensus. The bigger problem is engagement: CEO Steve Huffman said search referrals fell by more than 1 million per week on average in October and warned DAUs could drop a low-double-digit percentage in Q4 from the current 130 million if the trend holds. Management pointed to Google's AI Overviews and AI Mode plus lower rankings for machine-translated content. Shares are down 18.97% to $105.01 premarket, a new 52-week low, extending the pressure that followed Thursday's Q3 release and 8-K. The company is leaning on app installs, logged-in tests in select international markets, and a $660M remaining buyback to offset the traffic loss.
At the time of this announcement, RDDT was trading at $101.23 on NYSE in the Technology sector, with a market capitalization of approximately $24.9B. The 52-week trading range was $119.27 to $263.50. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Benzinga.