Why is RDDT stock falling today? Two things investors are watching

・Reddit signed an estimated $60 million-a-year licensing agreement with Google in 2024 that allows the tech giant to use its data to train AI models.

・A Marketbeat report stated that Allspring Global Investments Holdings reduced its stake in the social media company by nearly 60% during the first quarter.

・Last week, Chief Operating Officer Jennifer L. Wong sold around $7.75 million worth of company stock.

Reddit (RDDT) was in focus on Wednesday after a report said the social media platform is considering cutting off Google’s access to its content for AI use, while an institutional shareholder reportedly disclosed a substantial reduction in its stake in the company.

At the time of writing, the stock was down nearly 6%, and RDDT was among the top trending tickers on Stocktwits.

Why Reddit’s Google AI Partnership Is Under Scrutiny

According to a Wall Street Journal report, Reddit is weighing whether to cut off Google’s access to its content for AI use.

While Reddit has benefited from licensing its library of user-generated content for AI training, executives are reportedly evaluating whether the arrangement still makes strategic sense if AI-generated responses reduce platform visits. No final decision has been made, according to the report.

Reddit signed an estimated $60 million-a-year licensing agreement with Google in 2024 that allows the tech giant to use its data to train AI models.

The move reflects growing concerns that Google’s AI-powered search features are reducing traffic to publisher websites by answering user queries directly, limiting referral clicks. According to the report, publishers including USA Today, Politico, Reuters, The Economist, and People are also reassessing their relationships with Google and exploring whether to restrict access to their content.

RDDT: Institutional Selling Adds To Pressure

Separately, a Marketbeatreport on Wednesday stated that institutional investor Allspring Global Investments Holdings reduced its stake in the social media company during the first quarter. Allspring reportedly cut its holdings by 59.4%, selling 210,403 shares and ending the quarter with 144,037 shares valued at about $19.6 million.

This comes after Reddit’s Chief Operating Officer Jennifer L. Wong sold around $7.75 million worth of company stock on July 15. The transactions followed the exercise of stock options and were executed under a pre-arranged Rule 10b5-1 trading plan. Wong sold a total of 39,167 Class A shares in multiple transactions at prices ranging from $190.54 to $206.83 per share, according to an SEC filing.

Retail’s Take On RDDT

Retail sentiment remained ‘bearish’ over the past 24 hours for RDDT on Stocktwits, with chatter focused on the company’s valuation.

One user said the company could be ‘way overvalued.’

The stock is down more than 23% so far this year.

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