RDDT heads into the week of August 14 with a notable tension: short interest has climbed meaningfully since late July even as the stock bounced hard off its post-earnings lows, setting up a tug-of-war between rebuilding bears and buyers treating the dip as an opportunity.
The short side has been quietly building. Short interest now represents nearly 14% of the free float — up 7.2% on the week and 6.2% over the past month, reaching roughly 19.1 million shares. That increase did not come at a premium: cost to borrow has actually fallen sharply, dropping 34% on the week to just 0.34%. Borrow is plentiful, with availability running at 619% — meaning shares available to lend comfortably outnumber the shares already borrowed. That is well above the 52-week tightest reading of 442%, which briefly touched in early August. The lending market is not signalling a squeeze; if anything, the easing conditions have made it cheaper and easier for new shorts to establish positions. Options traders are more cautious than they were a month ago. The put/call ratio is running at 0.89, above its 20-day average of 0.85 and near the upper end of the past year's range — though at roughly 1.2 standard deviations above the mean, the skew is elevated but not extreme.
The Street is clearly re-rating RDDT lower in the wake of the July 30 earnings print, though opinions are fractured on how far down the price belongs. Most analysts who responded to the quarter cut their targets — JP Morgan's Doug Anmuth moved his to $185 from $200, while a cluster of others at Oppenheimer, Wedbush, Piper Sandler, Wells Fargo, and Cantor Fitzgerald also trimmed, sending the consensus mean price target to roughly $215. That still implies meaningful upside from the current price of $158, but the direction of travel matters. The outliers were B. Riley Securities and Truist, both of which raised targets, to $270 and $275 respectively, leaning on the AI licensing angle. Bulls point to Reddit's growing data licensing revenue from AI training deals as a durable, high-margin stream that supplements advertising. Bears focus on the company's dependency on Google search traffic for user acquisition, and the risk that algorithm changes or AI-driven search disruption erodes logged-out DAU growth — the metric that spooked markets most in the Q2 print. Valuation reflects the hangover: the price-to-earnings multiple has contracted roughly 26% over the past month, and EV/EBITDA sits near 15x.
The institutional holder list adds a layer of nuance. BlackRock and Fidelity both added shares in their most recent reporting periods. AllianceBernstein built a position of nearly 4.9 million shares. On the other side, Coatue trimmed aggressively — cutting by 2.76 million shares — and Tiger Global also reduced its stake by over 1.3 million shares. CEO and founder Steve Huffman sold a combined 18,000 shares on August 4 at prices between $154 and $163, generating roughly $2.9 million in proceeds. Those transactions carry a trade significance score of just 2 out of 10, suggesting routine plan-driven sales rather than a directional signal, and Huffman's overall 90-day net activity across all insiders is actually positive at roughly 69,000 net shares bought. Still, the CEO selling into the post-earnings bounce — at prices below where he sold in mid-July at $201 — is worth noting as context.
The July 30 print itself was the defining event for the current setup. The stock fell nearly 21% the following day and gave back a further net 15% over the ensuing five days, erasing a large portion of what had been a strong year-to-date run. The stock has since recovered modestly — up about 5% on the week — but remains 21% below where it was a month ago. Closest correlated peer PINS was roughly flat on the week, while MAX and FUBO both posted gains of 7-9%, suggesting the broad peer group has not suffered RDDT's specific hangover.
The ORTEX short score has been running in the mid-to-upper 50s all week — a middling reading that reflects neither extreme bearish conviction nor strong short-covering pressure. The factor picture is similarly mixed: earnings momentum over both 30 and 90 days ranks in the 85th-86th percentile, and analyst recommendation divergence ranks in the 95th percentile, pointing to meaningful upside implied by the consensus. Value factors, however, rank in the bottom quartile. What to watch next is whether the short interest build stalls or accelerates as the stock tests the upper end of its post-earnings range — and whether the AI licensing revenue narrative proves durable enough to pull analyst targets back up before the next earnings print on October 30.
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