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Reddit Faces Normalization Pain

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Update - March 10, 2025

Reddit ended down 20% and over 50% from the highs.  The stock needs to close the gap to $80, before Reddit gets appealing. 

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Original article posted on Feb. 3

  • Reddit's current growth rate is unsustainable with U.S. DAU growth decelerating and future growth likely to be challenging, similar to other social media stocks.
  • The stock trades at over 20x forward sales, a multiple other social media stocks were unable to sustain.
  • Investors should be cautious; while Reddit may report strong Q4 results, sustaining growth to justify its current stock price is uncertain.
The stock market has an established history of smacking down social media stocks when the major growth phase ends. Reddit, Inc. (NYSE:RDDT) will ultimately face this outcome when the current spectacular growth phase normalizes. My investment thesis is ultra-bearish on the stock at these unsustainable valuations.


Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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