Technology

Archive: https://archive.is/2025.03.28-120233/https://www.bloomberg.com/news/articles/2025-03-28/reddit-s-50-plunge-fails-to-entice-dip-buyers-as-growth-slows

The gloomy sentiment around Reddit Inc. has failed to dissipate after its shares fell 50% from a February high, with volatile technology stocks under pressure. 

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. Reddit’s outlook seemed precarious because its 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.

“It’s been super overvalued,” Bob Lang, founder and chief options analyst at Explosive Options said of Reddit shares. “Their growth rate is very strong, but they still are not making any money”