Reddit stock drops 29% in its worst day ever

Reddit stock fell 29.22%, its worst day since going public, after weak Q4 sales guidance.

Shares dropped on Friday, beating the previous record one-day drop of 20.99% on July 31. Reddit projected Q4 sales of $1 billion to $1.03 billion, below analysts' $1.05 billion estimate, per CNBC. Q3 sales grew 53% over a year earlier, slower than prior quarters, but beat Wall Street expectations on earnings and revenue.

Reddit also announced a test requiring users to log in to access content, with a pilot in selected markets outside the US in the coming months. According to BleepingComputer, CEO Steve Huffman said Reddit will gradually become a "logged-in service" with limited access for visitors without accounts, citing personalization and content scrapers. Reddit says most unauthorized data access happens through logged-out pages.

Multiple analysts downgraded the stock. Which content will be restricted, which countries come first and rollout timelines have not been determined. Huffman said the front page should stay accessible to all for now.

The facts we checked

According to CNBC and BleepingComputer

1. Reddit shares fell 29.22% on Friday, the worst drop since the company went public in 2024.Figure · CNBC
2. The previous record one-day drop was 20.99% on July 31.Figure · CNBC
3. Reddit projected fourth-quarter sales of $1 billion to $1.03 billion, below analysts' estimate of $1.05 billion.Reported · CNBC
4. Reddit reported Q3 sales growth of 53% over a year earlier, slower than previous quarters, but beat Wall Street expectations on both earnings and revenue.Reported · CNBC
5. CEO Steve Huffman told CNBC that search-referral traffic from Google went "down meaningfully in this quarter" due to AI.Quote · CNBC
6. Reddit announced it will test requiring users to log in to access content. A pilot will begin in selected markets outside the United States in the coming months.Fact · CNBC, BleepingComputer
7. In a post, Huffman said Reddit will gradually become a "logged-in service" with limited access for visitors without accounts.Reported · BleepingComputer
8. According to Huffman, the two main reasons are more personalization and the growing problem of content scrapers.Reported · BleepingComputer
9. Reddit says most unauthorized data access happens through its logged-out pages. AI platforms and search engines that want the data will continue to license it under commercial agreements.Reported · BleepingComputer
10. According to Huffman, the change is intended to increase logged-in users, who are more active and help the advertising business.Reported · CNBC
11. Which content will be restricted, which countries come first, and rollout timelines have not been determined. Huffman said Reddit currently believes the front page should stay accessible to all, and that people arriving from search or other external links should see at least the page the URL points to.Reported · BleepingComputer
12. Huffman: "Reddit is the last platform to provide basically unfettered logged-out access, and that's largely because of me. I've been holding that line."Quote · CNBC
13. Reddit will not require real names or identification documents, will re-release a read-only incognito mode in its app, and will let users opt out of personalized advertising.Reported · BleepingComputer
14. Multiple analysts downgraded the stock after the results. Citizens said uncertainty around user growth amid the login switch "puts more pressure on user monetization."Reported · CNBC

Sources

• CNBCReddit stock plunges 29% after weak outlook, wrapping its worst day ever
• BleepingComputerReddit to lock content behind logins to fight scrapers