Hiddenite Capital Partners LP Sells 30,000 Shares of Reddit Inc. $RDDT

Key Points

• Hiddenite Capital Partners reduced its Reddit position by 25% in the third quarter, selling 30,000 shares and retaining 90,000 shares valued at approximately $12.82 million.
• Reddit reported strong quarterly results, with revenue rising 53% year over year to $894.96 million and EPS of $1.40 exceeding estimates. However, concerns over declining U.S. traffic, Google’s AI search changes and Reddit’s user-acquisition strategy have pressured the stock.
• Insiders sold approximately $46.9 million of Reddit shares over the past 90 days, while analysts broadly cut price targets and some downgraded the stock; despite this, the consensus rating remains “Moderate Buy” with a $180.91 target.

Hiddenite Capital Partners LP cut its position in Reddit Inc. (NYSE:RDDT - Free Report) by 25.0% in the third quarter, according to its most recent Form 13F filing with the SEC. The institutional investor owned 90,000 shares of the company's stock after selling 30,000 shares during the quarter. Reddit makes up approximately 2.3% of Hiddenite Capital Partners LP's investment portfolio, making the stock its 13th largest holding. Hiddenite Capital Partners LP's holdings in Reddit were worth $12,820,000 at the end of the most recent reporting period.

Several other hedge funds have also modified their holdings of the company. Evansbrook LLC boosted its holdings in shares of Reddit by 2.2% in the 1st quarter. Evansbrook LLC now owns 2,736 shares of the company's stock valued at $368,000 after buying an additional 59 shares in the last quarter. Signaturefd LLC grew its position in shares of Reddit by 7.6% in the 2nd quarter. Signaturefd LLC now owns 878 shares of the company's stock worth $152,000 after buying an additional 62 shares during the last quarter. EverSource Wealth Advisors LLC raised its stake in shares of Reddit by 48.1% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 197 shares of the company's stock worth $34,000 after acquiring an additional 64 shares in the last quarter. Versant Capital Management Inc raised its stake in shares of Reddit by 31.1% during the 2nd quarter. Versant Capital Management Inc now owns 291 shares of the company's stock worth $51,000 after acquiring an additional 69 shares in the last quarter. Finally, Central Pacific Bank Trust Division raised its stake in shares of Reddit by 8.6% during the 3rd quarter. Central Pacific Bank Trust Division now owns 885 shares of the company's stock worth $126,000 after acquiring an additional 70 shares in the last quarter.

Insider Buying and Selling at Reddit

In other news, Director Robert A. Sauerberg sold 5,128 shares of the firm's stock in a transaction dated Tuesday, August 25th. The stock was sold at an average price of $159.92, for a total value of $820,069.76. Following the completion of the transaction, the director directly owned 27,087 shares in the company, valued at $4,331,753.04. This trade represents a 15.92% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CEO Steve Huffman sold 17,308 shares of Reddit stock in a transaction dated Tuesday, October 13th. The stock was sold at an average price of $158.57, for a total value of $2,744,529.56. Following the sale, the chief executive officer directly owned 336,432 shares of the company's stock, valued at $53,348,022.24. This trade represents a 4.89% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 288,052 shares of company stock worth $46,878,483. 28.48% of the stock is currently owned by insiders.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Reddit’s underlying financial results remain strong: quarterly revenue increased 53% year over year to approximately $895 million, while earnings exceeded analyst expectations. A separate analysis also highlighted improving average revenue per user, suggesting that advertiser monetization and engagement remain healthy. Reddit: Google Is Taking Its Traffic, But The Selloff Has Gone Too Far
• Positive Sentiment: Although analysts broadly reduced their targets, many remain above the recent share price. Deutsche Bank maintained a “buy” rating with a $165 target, while Jefferies, Goldman Sachs, Piper Sandler and JPMorgan assigned targets ranging from $140 to $155, $145 and $150, respectively. This indicates that the selloff may have created potential value if Reddit stabilizes traffic and user growth. Deutsche Bank Reddit Rating
• Neutral Sentiment: Analyst valuation comparisons continue to debate whether RDDT offers better value than other internet-platform stocks, including Spotify. The discussion reinforces that Reddit’s valuation depends heavily on its ability to convert engagement into sustainable advertising growth. RDDT vs. SPOT
• Negative Sentiment: The dominant catalyst is concern that Google’s AI search changes are reducing traffic to Reddit, particularly in the United States. Investors are also worried that Reddit’s logged-in-only strategy could limit user acquisition and raise the cost of attracting new users. Reddit Stock Sinks as Q3 Results Clash With User Outlook
• Negative Sentiment: A wave of target reductions and downgrades—including moves to “neutral,” “hold,” “in-line” and “market perform”—has weakened investor confidence, even though revised targets remain above the recent price. Reddit Fair Value Moves Lower
• Negative Sentiment: Kirby McInerney LLP announced an investigation into potential securities-law or business-practice violations involving Reddit and its management. The announcement is preliminary and does not establish wrongdoing, but it adds legal and reputational risk. Reddit Investigation Announcement

Reddit Price Performance

Shares of RDDT opened at $91.05 on Tuesday. The company's fifty day moving average price is $149.13 and its 200-day moving average price is $159.42. Reddit Inc. has a 1-year low of $89.28 and a 1-year high of $263.50. The firm has a market capitalization of $17.52 billion, a PE ratio of 31.33, a price-to-earnings-growth ratio of 0.62 and a beta of 2.05.

Reddit (NYSE:RDDT - Get Free Report) last issued its earnings results on Thursday, October 29th. The company reported $1.40 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.33 by $0.07. Reddit had a return on equity of 29.02% and a net margin of 31.35%. The company had revenue of $894.96 million during the quarter, compared to analyst estimates of $874.91 million. During the same quarter last year, the business posted $0.80 EPS. The firm's quarterly revenue was up 53.0% on a year-over-year basis. As a group, research analysts anticipate that Reddit Inc. will post 5.28 EPS for the current fiscal year.

Wall Street Analyst Weigh In

RDDT has been the subject of a number of analyst reports. Wedbush decreased their target price on shares of Reddit from $221.00 to $150.00 and set an "outperform" rating for the company in a research report on Friday. Bank of America reaffirmed a "neutral" rating and issued a $135.00 price target (down from $190.00) on shares of Reddit in a report on Friday. Jefferies Financial Group reduced their price target on Reddit from $200.00 to $155.00 in a research report on Friday. Citigroup downgraded Reddit from a "market outperform" rating to a "market perform" rating in a research report on Friday. Finally, DA Davidson decreased their price objective on Reddit from $185.00 to $125.00 and set a "buy" rating for the company in a report on Monday. Two research analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and fifteen have issued a Hold rating to the company. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $180.91.

About Reddit

Reddit, Inc operates a global online platform where users participate in communities organized around shared interests, topics and activities. Members can submit text posts, links, images and videos, as well as comment on and vote on content. The platform includes thousands of communities, commonly known as subreddits, covering subjects such as news, entertainment, technology, sports, finance and lifestyle.

Reddit generates revenue primarily through digital advertising, offering advertisers access to audiences based on community interests and user engagement.

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