Reddit stock drops 6% after Meta launches standalone app for online forums
Reddit's stock dropped 6% following the launch of Meta's new app, Forum, which aims to compete with Reddit for online discussions. Analysts express concerns that Forum could attract casual users away from Reddit, potentially impacting its user base. Despite Reddit's recent sales growth, its stock has fallen nearly 40% this year.
- ▪Reddit shares fell about 6% on Friday due to concerns over Meta's new app, Forum.
- ▪Analysts at Truist view Forum as a direct competitor to Reddit for public discourse.
- ▪Reddit's stock has decreased almost 40% this year, despite strong sales growth.
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Reddit shares fell about 6% on Friday on concern that a new app from Meta called Forum could create an alternative avenue for internet users to congregate and create discussion groups.Forum, launched as a test app on Apple's iOS, is part of Facebook Groups. Analysts at Truist wrote in a note on Friday that it's "an attempt by the company to compete against Reddit as an online forum for public discourse" and "represents a new threat."Reddit's stock is now down almost 40% this year despite a strengthening online ad business. In April, the company reported its seventh-straight quarter of sales growth topping 60%. Meta, meanwhile, reported revenue growth of 33% in the latest quarter.
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