Reddit's 50% Stock-Price Plunge Fails to Entice Buyers as Growth Slows (yahoo.com) 38
Though it's stock price is still up 200% from its IPO in March of 2024
— last week Reddit's stock had dropped nearly 50% since February 7th.
And then this week, it dropped another 10%, reports Bloomberg, citing both the phenomenon of "volatile technology stocks under pressure" — but also specifically "the gloomy sentiment around Reddit..." The social media platform has struggled to recover since an earnings report in February showed that it is failing to keep up with larger digital advertising peers such as Meta Platforms Inc. and Alphabet Inc.'s Google, which have higher user figures. Reddit's outlook seemed precarious because its U.S. traffic took a hit from a change in Google's search algorithm.
In recent weeks, the short interest in Reddit — a proxy for the volume of bets against the company — has ticked up, and forecasts for the company's share price have fallen. One analyst opened coverage of Reddit this month with a recommendation that investors sell the shares, in part due to the company's heavy reliance on Google. Reddit shares fell more than 5% in intraday trading Friday. "It's been super overvalued," Bob Lang, founder and chief options analyst at Explosive Options said of Reddit. "Their growth rate is very strong, but they still are not making any money." Reddit had a GAAP earnings per share loss of $3.33 in 2024, but reported two consecutive quarters of positive GAAP EPS in the second half of the year...
At its February peak, Reddit's stock had risen over 500% from the $34 initial public offering price last March. Some of the enthusiasm was due to a series of deals in which Reddit was paid to allow its content to be used for training artificial intelligence models. More recently, though, there have been questions about the long-term growth prospects for the artificial intelligence industry.
"On Wall Street, the average price target from analysts has fallen to about $195 from $207 a month ago," the article points out. "That still offers a roughly $85 upside from where shares closed following Thursday's 8% slump..."
Meanwhile Reuters reported that more than 33,000 U.S. Reddit users experienced disruptions on Thursday according to Downdetector.com. "A Reddit spokesperson said the outage was due to a bug in a recent update, which has now been fixed."
And then this week, it dropped another 10%, reports Bloomberg, citing both the phenomenon of "volatile technology stocks under pressure" — but also specifically "the gloomy sentiment around Reddit..." The social media platform has struggled to recover since an earnings report in February showed that it is failing to keep up with larger digital advertising peers such as Meta Platforms Inc. and Alphabet Inc.'s Google, which have higher user figures. Reddit's outlook seemed precarious because its U.S. traffic took a hit from a change in Google's search algorithm.
In recent weeks, the short interest in Reddit — a proxy for the volume of bets against the company — has ticked up, and forecasts for the company's share price have fallen. One analyst opened coverage of Reddit this month with a recommendation that investors sell the shares, in part due to the company's heavy reliance on Google. Reddit shares fell more than 5% in intraday trading Friday. "It's been super overvalued," Bob Lang, founder and chief options analyst at Explosive Options said of Reddit. "Their growth rate is very strong, but they still are not making any money." Reddit had a GAAP earnings per share loss of $3.33 in 2024, but reported two consecutive quarters of positive GAAP EPS in the second half of the year...
At its February peak, Reddit's stock had risen over 500% from the $34 initial public offering price last March. Some of the enthusiasm was due to a series of deals in which Reddit was paid to allow its content to be used for training artificial intelligence models. More recently, though, there have been questions about the long-term growth prospects for the artificial intelligence industry.
"On Wall Street, the average price target from analysts has fallen to about $195 from $207 a month ago," the article points out. "That still offers a roughly $85 upside from where shares closed following Thursday's 8% slump..."
Meanwhile Reuters reported that more than 33,000 U.S. Reddit users experienced disruptions on Thursday according to Downdetector.com. "A Reddit spokesperson said the outage was due to a bug in a recent update, which has now been fixed."
It's too easy for AI companies to steal content (Score:5, Interesting)
It's all pump and dump nowadays (Score:1, Interesting)
Hey, you forgot about mentioning "pump and dump"!
You are a non-functional autistic and you keep on posting the same things in loops and some sick people abuse and manipulate you by encouraging you to keep on doing that because it fits their crazy extreme-leftist narrative even if the you very rarely makes any sense in your posts and just keeps on exposing your mental problems. What a shame such people are, manipulating mentally deficient patients! Disgusting! They should be ashamed of themselves!
references:
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Crap is readily available and free, so that's what "AI" will be trained on.
The idea that something like this can attract hundreds of billions in "investment" is laughable, yet here we are. It does.
People like crap.
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Reddit is not worth much to anyone who understands it because it real business model is one that is not hard to reproduce for some VC guys (so will be) and at best is going to generate a rather boring steady revenue stream.
People don't pay for stuff on the web unless you beat them over the head practically take their wallet. Its just online culture. The best you can do with reddit is show ads, and people will climb mountains just to block them. If you do draconian things with the API the users revolt.
The
Neutered by the far right (Score:2, Insightful)
Reddit's toxic management disables subs whenever Musk complains.
No wonder people are leaving.
Mouthpiece of King Donnie.
Managed by little dictators (Score:2, Insightful)
who write their own subreddit rules and make it perfectly clear that you're not welcome if you have another opinion.
> The purpose of r/Ukraine is to amplify Ukrainian voices.
> Sharing of russian narratives in any way, shape or form is banned.
Just like democracy, it's so much fun if everyone would just agree with you.
Re: (Score:2)
Re:Neutered by the far right (Score:5, Informative)
Free speech absolutist Elon got his feefees hurt. https://www.theverge.com/comma... [theverge.com]
Re: (Score:1, Troll)
Wow.
That is absolutely provably demonstrably FALSE.
Reddit is by far the deepest and most expansive leftist cesspool on the planet. It makes a DNC convention look like a Sunday morning Catholic mass.
Here is your chance, Slashdot! (Score:2, Interesting)
Nature abhors a vacuum.
Re: Nature abhors a vacuum (Score:5, Funny)
Shhh: My roomba is listening!
Slashdot is too vacuous to fill that vacuum. (Score:2)
Current management pack it with lame space filler and shit quality general news articles to do as little simulated work as practical.
Either they're vain enough to imagine they're doing a good job or their real objective was to keep this place irrelevant. Few current readers were here when it was still a tech site.
I
It’s a series of chatrooms (Score:5, Insightful)
Re:It's a series of chatrooms (Score:2)
The product is easy. Getting a large userbase is not, and that's what allows the juggernauts to hold their own against newcomers.
I used to run a forum that had about 3,000 monthly visitors. Once social media became a thing, my audience went down to... less than 10. My forum is still up, but it is a ghost town.
Nobody cares about quality or socialization. It's all about the numbers. I think the only reason why people might abandon an existing large social media platform is when they finally realize all t
Wait til Wednesday (Score:2)
It's Reddit FFS (Score:4, Insightful)
Before committing any funding to that stock, it would be wise to at least visit the site and get a feel
for what it really is first. Doing so would probably turn away at least 50% of potential investors.
I wouldn't invest YOUR money in Reddit even if you gave it to me for free.
Re:It's Reddit FFS (Score:4, Interesting)
Reddit is like drinking alcohol.
We know it's bad for us. It sort of seems "fun" at the time but later, we regret being near it.
Reddit is literally one of the worst sites ever (Score:2, Insightful)
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Just kiss Elon's ass and (Score:2, Insightful)
...he'll give Reddit billions
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Another social media I don't use much (Score:2)
keeping app (Score:4, Insightful)
I uninstalled instagram as I got depressed seeing my friends travel and enjoy their lives.
But I'll never uninstall reddit because you guys are more miserable than me .
F Reddit (Score:1)
If Huffman wants to suck this admin's dick (Score:2)
A bad investment like junk bonds (Score:2)
Redditt Stock plummets = no loss of value (Score:1)
Good (Score:1)
I hope that now Elon Musk will step in and buy it to get rid of some of the idiotic policies that are in place.
LK
RDDT vs PINS (Score:1)