Reddit Stock Plummets After Insider Selling Sparks Market Concern

San Francisco, CA – Shares of Reddit, Inc. gapped down on Friday, March 7, 2025, following notable insider selling activity. The stock opened at $147.02, down from its previous close of $150.72, and last traded at $146.51 with a trading volume of 793,856 shares.

On March 4, an insider sold 92,299 shares at an average price of $157.35, totaling approximately $14.5 million. This sale reduced their ownership stake by 44.52%, leaving them with approximately 115,001 shares, valued at $18.1 million. The transaction was disclosed in a filing with the Securities and Exchange Commission.

Additionally, Reddit’s Chief Accounting Officer sold 11,965 shares on the same day, averaging $157.41 per share for a total of $1.88 million, which resulted in a 19.82% decrease in their holdings. Similarly, the CEO sold 14,000 shares on February 28 at an average price of $160.30, valued at approximately $2.24 million, reducing their position by 2.29%.

Despite the insider sales, equity analysts have remained cautiously optimistic about Reddit’s prospects. Goldman Sachs recently raised its target price from $105 to $176 and issued a “neutral” rating on the stock. Other firms, including Bank of America and Raymond James, have also adjusted their target prices upward, with Raymond James setting a $250 target and giving a “strong-buy” rating.

Market analysts note that Reddit has garnered an average consensus rating of “Moderate Buy” with a consensus price target of $175.95. The company currently has a market capitalization of $24.27 billion and a negative price-to-earnings ratio of -17.35.

In terms of financial performance, Reddit reported earnings of $0.36 per share in its last quarterly results on February 12, exceeding analysts’ expectations of $0.24. Despite the positive earnings announcement, the company has a net margin of -37.25% and a return on equity of -24.71%.

Institutional investors have been active in modifying their holdings in Reddit as well. Plato Investment Management Ltd and several other firms have established new stakes in the company during recent quarters. These positions are reflecting the growing interest and volatility surrounding Reddit’s stock.

Reddit, Inc., founded in 2005, operates a popular platform that organizes digital communities around various interests, enabling users to share their experiences and engage in discussions. The company is headquartered in San Francisco.