Shares of Reddit plunged 29% in Friday’s trade on October 30, falling to $91.30 apiece, after the social networking platform warned that user growth could weaken further in the fourth quarter as declining traffic from Google Search weighs on its audience.
The warning overshadowed the company’s stronger-than-expected third-quarter results. If stock close at the same level, the decline could mark Reddit’s worst single day fall since its stock market debut in March 2024.
The company forecast fourth-quarter revenue of $1 billion to $1.03 billion, below the Bloomberg consensus estimate of $1.05 billion. The outlook raised concerns about whether its advertising business can maintain its growth momentum amid changes in online search.
Chief Executive Steve Huffman said daily active unique visitors could decline by a low double-digit percentage in the current quarter from approximately 130 million if referral traffic continues to weaken.
Reddit has increasingly blamed changes to Google’s search experience for reducing the number of users directed to its platform.