Nearly a third of capitalization evaporated in one session. Reddit fell 29.22% on the stock market on Friday October 30. This is the worst day in its stock market history since its introduction in 2024. The forum of forums published forecasts significantly lower than expected. Above all, he admitted a bitter reality: the artificial intelligence of Google Search (AI Overviews) cuts off a substantial part of his traffic. To respond, the platform is preparing to turn its back on the open web by imposing compulsory connection to read its content.
Key Points
Historic fall: RDDT stock dropped 29.22% in one session, shattering its previous negative record at the end of July (-20.99%).
Missed forecasts: Revenue expectations for the current quarter are $20 million below analyst consensus.
The Google Paradox: Google's AI Overviews capture query answers without generating outbound clicks, despite a $60 million per year cross-licensing deal.
End of the open web? : Steve Huffman has confirmed that Reddit will eventually no longer be public at all. A total authentication wall is programmed to filter content and counter automation.
Reddit records worst session in its history on the stock market
It all started with a gap of $20 million compared to forecasts. Reddit expects fourth-quarter revenue of between $1 billion and $1.03 billion. However, the consensus of analysts was rather on 1.05 billion. Certainly, the past quarter still showed excellent health, with growth of 53% over one year. But the deceleration marks a sudden stop, and the Stock Exchange sanctioned Reddit without delay.
Faced with investors, Steve Huffman did not look for excuses. The Reddit boss admitted that organic traffic from Google search had “dropped significantly”. At issue: the artificial intelligence blocks placed at the top of the results. The situation is all the more Kafkaesque since Reddit sold access to its conversations to Google for around $60 million annually, as part of an agreement signed in 2024. Since then, the Mountain View giant has returned this raw material directly to Internet users... without offering them a way back to the forum.
“The developments in search highlight the fundamental problem with selling content to Google. »
Citizens JMP, equity research note
Behind these figures lies the vulnerability of a sham model. With around 100 million daily active users, Reddit is a dwarf among the social media giants. Indeed, its growth is largely based on occasional users, who land on a discussion thread after a Google query. When this traffic faucet seizes, the entire monetization machinery coughs.
The last human bastion against “AI slop”
This plunge by Reddit on the stock market poses an existential question to the entire digital ecosystem: what remains of the open web when the platforms close the floodgates? On the one hand, Reddit faces an army of SEO or government bots. These astroturfing tactics seek to manipulate search engines and AI results. On the other, it remains one of the last mass discussion spaces fueled almost exclusively by real humans. For the moment, it still partly escapes the textual mush (“AI slop”) and the low-effort articles that pollute the rest of the web.
On mobile, the transition is already underway aggressively. Pop-ups block access after a few seconds of reading. In the past, this forcing strategy has allowed the company to artificially boost its user metrics. This time, she takes a radical step forward.
“Reddit is the last major platform to offer virtually unfettered offline access, and it's largely my fault. I held that line. I think users will probably go through the same understanding I did, that this is a sign of the times. Ultimately, Reddit will no longer be public: you will have to log in to view the content. »
Steve Huffman, CEO of Reddit
From mass Web3 to central locking
This strategic withdrawal resonates curiously with the recent past of the platform. Reddit was once the scene of one of the largest mass adoption operations in Web3 history. His Collectible Avatars on Polygon had made it possible to create more than 10 million crypto wallets, often without the knowledge of novice users. Added to this were Community Points (MOON on r/CryptoCurrency, BRICK on r/FortNiteBR) and reserves in Bitcoin and Ethereum on the balance sheet. This promise of decentralization through protocols, however, ended in successive abandonments.
By choosing to padlock its doors behind a mandatory authentication wall, Reddit confirms the death of the shared public web. Faced with this asymmetrical balance of power, decentralized alternatives (Nostr, Farcaster, Lens) continue to promote the ideal of portable social graphs where access to discussions does not require any digital passport. But compared to the San Francisco juggernaut, their audience remains largely anecdotal.
The authentication wall test is about to be deployed on a larger scale. One thing is certain, it is indeed the end of an era!
