- Reddit fell 4.1% on Sept 17 amid renewed investor concern over AI data-licensing negotiations with Google, especially the economics of a future renewal.
- A Sept 15 Wells Fargo research note lowered confidence that Reddit and Google will renegotiate their AI content agreement on favorable terms.
- Third-party data showed Google search traffic to Reddit down about 10% YoY in September month-to-date after a 7% decline in August.
- Reddit's Q2 2026 earnings were strong on revenue and profit, but management flagged choppy search-engine traffic affecting US user growth.
- SEC Form 4 filings show insider sales in late August, including a filing dated August 31; insiders sold 156 times with zero purchases over the past six months.
- An earlier earnings report noted Q4 2024 daily active uniques rose 39% to 101.7 million, missing estimates of 103.3 million, due to a Google algorithm change affecting logged-out users; shares fell 15% in extended trading then.
Quotes
“The sell-off appears tied mainly to renewed investor concern around Reddit’s AI data-licensing negotiations, especially the economics of a future Google renewal, alongside signs of softer Google-driven traffic.”
“A September 15 Wells Fargo research note lowered confidence that Reddit and Google will renegotiate their AI content agreement on favorable terms, creating fresh uncertainty around a meaningful high-margin revenue stream.”
“In Q4 2024, Reddit's daily active unique visitors increased by 39% to 101.7 million, missing analysts' expectations of 103.3 million.”
“CEO Steve Huffman noted that search traffic has rebounded in Q1 2025.”