What Happened?
Shares of online community and discussion platform Reddit (NYSE: RDDT) fell 0.6% in the afternoon session after its Chief Operating Officer, Jen Wong, disclosed the sale of about $10 million in company stock.
The transaction was executed under a pre-arranged trading plan. This news compounded investor worries, as the stock had already fallen over the four previous trading sessions.
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What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 64 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5.5% on the news that bullish analyst price target hikes and growing optimism over its AI data licensing strategy improved market sentiment.
JMP Securities reiterated its Market Outperform rating and lifted its price target on the stock to $300 from $225. Similarly, Piper Sandler maintained an "Overweight" rating and raised its price target to $290 from $210. The positive sentiment stemmed from reports that Reddit was in discussions with partners like Google and OpenAI. The company looked to shift away from flat-fee content licensing deals, which currently brought in about $60 million annually from Google. Instead, Reddit aimed for a new structure where it would get paid based on how much its content is used to train artificial intelligence models. This potential for a new, more lucrative revenue stream excited investors. A broader market rally, fueled by a recent Federal Reserve interest rate cut, also provided a supportive backdrop for tech stocks.
Reddit is up 40% since the beginning of the year, but at $232.24 per share, it is still trading 14.2% below its 52-week high of $270.71 from September 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $4,604.
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