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Class action lawsuits

Reddit, Inc. Faces Class Action Securities Lawsuit Over Alleged Securities Fraud

Strategic Insights

— 1 min read

A class action securities lawsuit has been filed against Reddit, Inc., alleging that the company's false statements and concealment of material information led to losses for shareholders. The lawsuit claims that changes in Google Search's algorithm and features, such as AI Overview, caused users to stop searching on Google Search, resulting in reduced traffic to Reddit. The complaint alleges that defendants were aware of this reality and lacked a reasonable basis for their outlook on user rates and advertising revenues.

Key Takeaways:

  • A class action securities lawsuit was filed against Reddit, Inc. on behalf of shareholders who suffered losses due to alleged securities fraud between October 29, 2024, and May 20, 2025.
  • The complaint alleges that defendants made false statements and concealed that changes in Google Search's algorithm and features were causing users to stop searching on Google Search, leading to reduced traffic to Reddit.
  • Defendants allegedly knew 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, rather than an intent to visit the website.
  • The Company's public statements were allegedly materially false and misleading at all relevant times.
  • The lawsuit seeks to recover losses of shareholders who were adversely affected by the alleged securities fraud.
  • Shareholders who suffered a loss in Reddit, Inc. stock during the relevant time frame can seek a recovery by visiting https://zlk.com/pslra-1/reddit-inc-lawsuit-submission-form?prid=158403&wire=5&utm_campaign=3.
  • There is no cost or obligation to participate in the potential recovery.
  • Levi & Korsinsky, a nationally-recognized securities litigation firm, is representing the plaintiffs in the lawsuit.

Statistics:

  • The class action securities lawsuit was filed on behalf of shareholders who suffered losses between October 29, 2024, and May 20, 2025.
  • The lawsuit alleges that changes in Google Search's algorithm and features led to reduced traffic to Reddit, resulting in losses for shareholders.
  • Over 70 employees at Levi & Korsinsky are involved in representing investors in complex securities litigation.
  • The firm has secured hundreds of millions of dollars for aggrieved shareholders in the past 20 years.

Sources:

  • https://zlk.com/pslra-1/reddit-inc-lawsuit-submission-form?prid=158403&wire=5&utm_campaign=3
  • Newsfile Corp.
  • Levi & Korsinsky, LLP: Joseph E. Levi, Esq., Ed Korsinsky, Esq., and 33 Whitehall Street, 17th Floor, New York, NY 10004.

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