Reddit Investors Sue Over Alleged Securities Fraud

Strategic Insights -

Investors who lost money in Reddit, Inc. between October 2024 and May 2025 may be eligible for compensation. A class action lawsuit was filed against the company, alleging that executives made false statements about the impact of Google Search changes on user traffic and advertising revenues. The lawsuit claims that the company was aware of the decline in traffic but failed to disclose it to investors.

Key Takeaways:

  • The lawsuit seeks to recover losses on behalf of Reddit, Inc. investors who were affected by alleged securities fraud between October 29, 2024, and May 20, 2025.
  • The complaint alleges that defendants made false statements and/or concealed that changes in Google Search's algorithm were causing users to stop their query on Google Search, reducing traffic to the Reddit website.
  • The lawsuit claims that defendants were aware that the increase in the query term "Reddit" on search engines was due to users finding the answer on Google Search without intending to visit Reddit.
  • The company allegedly lacked a reasonable basis for its outlook on user rates and advertising revenues due to the zero-click search reality.
  • The lead plaintiff must be appointed by the Court by August 18, 2025, and investors may be entitled to compensation without paying any out-of-pocket costs or fees.

Statistics:

  • October 29, 2024, to May 20, 2025: The period during which investors allegedly suffered losses due to Reddit, Inc.'s alleged securities fraud.
  • $0: The out-of-pocket costs or fees that investors may pay to participate in the case.
  • 20 years: The number of years that Levi & Korsinsky, LLP has been securing hundreds of millions of dollars for aggrieved shareholders.
  • 70: The number of employees that Levi & Korsinsky has to serve their clients.
  • 7 years in a row: The number of years that Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States.

Sources:

  • GlobeNewswire
  • Levi & Korsinsky, LLP (Joseph E. Levi, Esq. and Ed Korsinsky, Esq.)