Overview
- A Wall Street Journal report that surfaced Wednesday triggered an intraday drop of roughly 9% in Reddit shares, which fell to a session low near $166.87 before a modest recovery.
- The story centers on Reddit’s existing $60 million‑per‑year data‑licensing agreement with Google, signed in 2024, and new internal discussions that have put renewal of that contract in doubt.
- Investors were further unsettled by insider sales: CEO Steve Huffman sold about $3.56 million of stock and COO Jennifer Wong sold about $7.75 million on July 15.
- Reddit is due to report Q2 2026 results after the market closes on July 30, a near‑term catalyst investors will use to reassess ad revenue and any licensing revenue changes; Jefferies says Reddit grew ad share in Q2.
- Google’s AI Overviews have reduced referral traffic to sites like Reddit, which could change the value of licensing deals and push Reddit to seek usage‑based terms or other partners with material effects for creators and platform revenue.