Reddit shares plunged 25% on Friday morning, putting the stock on pace for its largest single-day decline since the company went public.
The steep drop followed the online discussion platform’s release of a revenue outlook that fell short of analyst expectations.
Wall Street analysts warn the selling pressure may not be over. Several firms flagged concerns about the company’s growth trajectory in the wake of the guidance.
The weaker forecast raises questions about Reddit’s ability to sustain advertising momentum as it competes for digital marketing budgets.
Analysts also pointed to broader uncertainty in the social media advertising market, which has weighed on peers in recent quarters.
Investors reacted swiftly to the guidance miss, driving heavy trading volume in the stock during the morning session.
Reddit has yet to comment publicly on the market reaction. The company’s shares remain well below their post-IPO highs.
