Key Takeaways
- Reddit (RDDT) plummeted approximately 10% Thursday, bottoming at $128.11
- CTO Christopher Slowe offloaded 9,500 shares valued at approximately $1.34 million on March 23
- COO Jennifer Wong dumped more than 39,000 shares totaling roughly $6.6 million in separate transactions
- Wall Street analysts cite disappointing advertising sales feedback and decelerating user engagement
- RDDT has plunged nearly 40% year-to-date, trading significantly beneath both its 50-day and 200-day moving averages
Shares of Reddit tumbled dramatically Thursday following reports that two senior executives executed substantial insider stock sales, compounding what has already been a challenging year for the social media company.
The stock plummeted as much as 10.86% during the session, reaching an intraday low of $128.11. Trading activity registered approximately 2.4 million shares, roughly 56% beneath the stock’s typical daily volume of 5.5 million shares.
Chief Technology Officer Christopher Slowe disposed of 9,500 shares on March 23 at a mean price of $141.28, generating proceeds of approximately $1.34 million. This transaction reduced his ownership position by nearly 20%, leaving him with 38,413 remaining shares.
COO Jennifer Wong executed even larger transactions. She sold 5,658 shares on March 18 at $143.42 per share, followed by an additional disposal of 33,507 shares the same day at $143.41. The combined transactions generated approximately $5.6 million in proceeds. After these sales, Wong retains roughly 1.09 million shares valued at over $156 million.
Both transactions were properly disclosed through required SEC filings.
Wall Street Concerns Intensify
The executive stock sales aren’t the sole factor weighing on investor sentiment. Analysts have highlighted disappointing feedback from Reddit’s advertising sales initiatives, while concerns mount regarding decelerating user engagement and traffic expansion.
Cantor Fitzgerald slashed its price target from $240 down to $170, establishing a “neutral” stance. Goldman Sachs similarly reduced its target from $236 to $206, also maintaining a “neutral” rating.
However, bearishness isn’t universal. Needham preserved a “buy” recommendation with a $300 price target, and the consensus rating among Wall Street analysts remains at “Moderate Buy” with an average price target of $242.19.
That target represents a substantial premium to RDDT’s current trading level.
The stock’s 50-day moving average stands at $159.88, while its 200-day moving average sits at $200.15. RDDT is trading beneath both technical benchmarks and has declined nearly 40% year-to-date.
Reddit can point to a recent quarterly earnings victory. In its most recent quarterly disclosure on February 5, the platform delivered EPS of $1.24 compared to the Street consensus of $0.96. Revenue reached $725.61 million, representing 69.7% year-over-year growth and exceeding the $665.80 million analyst estimate.
Financial Metrics
The platform maintains a market capitalization of approximately $24.6 billion, trades at a price-to-earnings ratio of 49.14, and exhibits a beta of 2.40 — indicating the stock experiences greater volatility than the overall market.
Wall Street analysts collectively project Reddit will deliver EPS of $1.12 for the current fiscal year.
The technical outlook remains challenging. The stock presently displays a “Strong Sell” indication according to technical analysis metrics.
The stock concluded trading at $139.63 prior to Thursday’s session.
