Reddit shares fell by over 12% following negative coverage from analysts who doubt the sustainability of the platform's user growth. Redburn Atlantic's analysts initiated a 'sell' rating and set a low price target of $75, highlighting that much of Reddit's recent growth is attributed to changes made by Google to its algorithm. While user numbers have surged, the nature of the users—primarily seeking specific answers—does not contribute to long-term engagement, leading to skepticism about Reddit’s advertising potential compared to other social media platforms.
Reddit’s growth, though impressive, may not be sustainable as analysts predict a slowdown in user engagement due to changes in Google's algorithm.
Analysts from Redburn Atlantic initiated coverage of Reddit with a 'sell' recommendation, citing concerns over user growth sustainability and advertising effectiveness.
Collection
[
|
...
]