Class Action Lawsuit Filed Against Reddit, Inc. Over Securities Fraud Allegations

Strategic Insights -

Reddit, Inc. faces a class action lawsuit alleging securities fraud related to the company's publicly disclosed statements about its user growth and advertising revenue during a specific time frame. The lawsuit claims that defendants made false statements regarding changes in Google Search's algorithm and features, which allegedly led to a decrease in traffic to the Reddit website. If you suffered a loss in Reddit, Inc. stock between October 29, 2024, and May 20, 2025, you may be eligible to seek a recovery.

Key Takeaways:

  • The lawsuit alleges that Reddit, Inc. made false statements about changes in Google Search's algorithm and features.
  • The company allegedly concealed the fact that users were stopping their query on Google Search due to changes in the algorithm.
  • The changes in Google Search's algorithm and features were allegedly materially different from prior instances of reduced traffic to the Reddit website.
  • Defendants were aware that the increase in the query term "Reddit" on search engines was due to users getting the sought-after answer from Google Search without visiting Reddit.
  • The company allegedly lacked a reasonable basis for its outlook on user rates and advertising revenues.
  • The lawsuit seeks to recover losses of shareholders who were adversely affected by these alleged securities fraud actions.
  • The class action lawsuit is filed by Levi & Korsinsky LLP, a nationally recognized securities litigation firm.

Statistics:

  • The relevant time frame for the alleged securities fraud is October 29, 2024, to May 20, 2025.
  • The lawsuit claims that the company's publicly disclosed statements were materially false and misleading during this time frame.
  • Defendants allegedly concealed the true nature of the changes in Google Search's algorithm and features.
  • The lawsuit seeks to recover losses of shareholders who suffered a loss in Reddit, Inc. stock during the relevant time frame.

Sources:

  • News Release, "Reddit, Inc. Sued for $500,000 For Alleged Securities Fraud", https://zlk.com/pslra-1/reddit-inc-lawsuit-submission-form?prid=157559&wire=5&utm_campaign=16 (accessed July 21, 2025)