Reddit shares drop 18% after Steve Huffman reveals login limits
Reddit's stock slid 18% in after-hours trading after the company revealed it will start restricting access for people who are not logged in.
Chief Executive Officer Steve Huffman said this move, along with a revenue forecast that did not meet Wall Street's hopes, investors feared could affect traffic, especially since daily active users in the US are already slipping.
Reddit to test restrictions abroad Q4
Starting in the fourth quarter, Reddit will test these restrictions outside the US shifting away from its usual open-door policy.
Huffman pointed out that more than 80% of Reddit's revenue comes from signed-in users anyway.
Chief Operating Officer Jen Wong admitted this could shrink reach at first but believes it will help keep users engaged long term.
She also clarified that the new strategy is not tied to ongoing talks with AI companies about data licensing.