this post was submitted on 17 Mar 2025
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Technology

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Reddit Rated Sell as Redburn Flags Risk From Google Algorithm (www.bloomberg.com)
submitted 1 month ago* (last edited 1 month ago) by misk@sopuli.xyz to c/technology@beehaw.org
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Archive: https://archive.is/2025.03.17-204842/https://www.bloomberg.com/news/articles/2025-03-17/reddit-rated-sell-as-redburn-flags-risk-from-google-algorithm

The user growth experienced by Reddit Inc. is a “gift” from Alphabet Inc.’s Google that may have led to excessive bullishness on the social-media company, according to analysts who have become the stock’s biggest bear.

Redburn Atlantic’s James Cordwell and Joseph Barker initiated coverage of Reddit with a sell recommendation, saying that while the financial performance since its initial public offering has been “stellar,” Wall Street is not appreciating the vulnerability of its growth to Google Search. Additionally, the analysts see user growth stalling in 2025.

“The reality, in our view, is that Reddit’s potential, breadth of appeal and thus value as a company are being overstated,” Cordwell and Barker wrote in a note published on Monday.

Shares fell 2% on Monday and is down 23% this year. It now has 15 buy-equivalent recommendations, seven holds and three sells among analysts tracking the stock, according to data compiled by Bloomberg. Cordwell and Barker’s price target of $75 is the lowest.

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[–] megopie@beehaw.org 8 points 1 month ago

It’s so absurd, the website’s appeal lies entirely in the user driven experience created by volunteer moderators and user submitted content. Yet the path of profit growth for them lies in company placed ads, and LLM bots spamming comment sections to astroturf. The more they push for profit, the less appeal to users the site has.