Reddit's Short Interest Climbs as Earnings Loom

Short sellers rebuilt positions in RDDT this week, pushing bearish exposure higher even as the stock fell 12.3% to $136.46, its worst weekly performance in months.

Short interest rose to 15.5% of the free float, up from 14.3% a week earlier. That's a 7.6% increase in shares borrowed over five sessions. The move reverses a month-long decline: shorts had been covering steadily through October, but the past week saw fresh positioning added rather than trimmed. The current level, around 21.4 million shares sold short, puts RDDT back toward the top end of its recent range.

The borrow market remains loose despite the rise in short positions. Availability is running at 329% of outstanding short interest, meaning there are more than three shares available to lend for every one currently borrowed. Cost to borrow is essentially unchanged at 0.42%, flat on the week. That combination suggests the new short interest reflects deliberate bearish conviction rather than a technically constrained trade. There is no squeeze setup here. The put/call ratio at 0.86 is barely above its 20-day average of 0.856, leaving options positioning broadly neutral.

The Street has a more constructive view than the short book. The consensus price target sits around $213, roughly 56% above Tuesday's close, though the most recent analyst moves came after last quarter's results in late July, when several firms cut targets following a sharp earnings miss. Morgan Stanley, JPMorgan, and Oppenheimer all trimmed targets then but kept positive or neutral ratings. The bull case centers on accelerating app downloads and eight consecutive quarters of revenue growth above 60% year on year. The bear case points to global daily active user growth tracking at 12.8% against consensus expectations of 15.4%, with U.S. engagement softer and Google referral traffic remaining a key vulnerability.

Inside the ownership register, CEO Steve Huffman holds a Schedule 13D stake on file, marking him as an activist-classified holder under SEC disclosure rules. His last reported position was 24.8% of the class as of May, down from 27.2% prior. As the disclosure note requires: stakes are as last disclosed around the 5% threshold, and positions can change without a further filing. BlackRock filed a Schedule 13G amendment as recently as October 27, raising its reported stake to 7.3% from 5.0% previously, a notable move from one of the stock's largest passive holders. COO Jennifer Wong sold approximately $7.7 million in open-market shares on October 14, all under a pre-arranged 10b5-1 plan, limiting the signal from that activity.

Reddit's last earnings print, reported July 30, sent the stock down nearly 21% on the day. Q3 results are due October 29. The setup this time includes short interest running 1.2 percentage points higher than it was entering that July report, with availability still ample and borrow costs low. Wikipedia page views carried a z-score of 2.83 as of October 21, its highest retail attention reading relative to its own 90-day history, which is colour rather than a lead signal, but it reflects a spike in public interest ahead of the print.