New York, January 15, 2026, 14:23 EST — Regular session
- Reddit’s shares dropped in New York following RBC’s report of “mixed” advertising feedback.
- Evercore started coverage this week, issuing an outperform rating with a $320 price target
- A filing shows CFO Andrew Vollero sold shares via a pre-arranged trading plan
Shares of Reddit Inc (RDDT) slid Thursday after a report from RBC Capital Markets. Unlike upbeat ad-agency checks on Meta Platforms and Alphabet’s Google, feedback on Reddit was “more mixed,” said analyst Brad Erickson. He described responses as “challenging,” pointing to low CPMs—cost per 1,000 ad impressions—that often didn’t convert well for smaller brands. Several marketers favored growing an organic audience instead of relying on paid ads, finding better ROI that way. The stock dropped 9.3% to $229.01 in afternoon trading, after hitting a high of $254.38 on volume around 7.6 million shares. (Investors)
The pullback stands out because investors treat every advertising metric as a gauge of Reddit’s ability to expand past its core user base. Given the high expectations, even a small hiccup in conversion numbers can spark steep price moves.
Sentiment shifted higher this week after Evercore ISI initiated coverage with an outperform rating, setting a $320 price target. Analyst Mark Mahaney emphasized the “significant opportunity for Reddit to gap up its average revenue per user,” driven by the launch of “Max” campaigns using AI for automated targeting and bidding. He also noted data-licensing deals with OpenAI and Alphabet. (Investors)
Reddit runs a massive network of topic-focused forums known as subreddits, boasting over 100,000 active communities. Reuters data shows the site attracts upwards of 101 million daily active users. (Reuters)
A filing this week showed Chief Financial Officer Andrew Vollero sold 3,974 Class A shares on Jan. 9 and Jan. 13, with prices mostly between $260 and $263. These sales followed a Rule 10b5-1 plan set up last September. Such plans let executives pre-schedule trades, often to diversify their portfolios. (SEC)
The gap between the two research notes puts traders squarely on one question: Reddit can rack up impressions, but performance marketers want proof those views translate into sales. That’s the hurdle for ad budgets.
Max campaigns target automating ad purchases and bid optimization, but early reactions are still mixed given their novelty. Investors are also watching closely to determine whether data licensing will develop into a steady revenue source instead of just a short-term spike.
Ad checks provide just anecdotal evidence, and digital marketing budgets can shift rapidly if conversion rates dip or spending gets squeezed. If ad prices fail to rise with performance, the recent stock rally could vanish just as fast.
Reddit hasn’t disclosed the date for its next earnings report yet, but Zacks expects it to drop on Feb. 11, based on previous patterns. Investors will be keenly awaiting news on advertiser demand and if Max campaigns are driving better efficiency. (Zacks)
