10 Firms Heavily Hit by Market Pessimism

3. Reddit Inc. (NYSE:RDDT)

Reddit shares fell by 12.31 percent on Tuesday to close at $110.10 each following a “sell” recommendation from an investment firm.

While RDDT saw impressive user growth, analysts from Redburn raised doubts on its sustainability, calling it a “gift” from Alphabet’s Google.

Google made changes to its algorithm that led RDDT to nearly double its size in the past 18 months. However, Redburn believed that most of its users looking for answers to specific questions do not convert to log-in users, who are ultimately much more valuable.

“There is clear evidence that the boost to traffic and visibility from these changes is hitting a ceiling,” the analysts said, adding that “what Google giveth, it will taketh away.”