Shares of Reddit, the US online forum company, fell about 6% on May 22 after Meta began testing Forum on iOS within Facebook Groups.

Truist analysts said the app could compete with Reddit for public discussions and weaken its appeal among casual users if it gains traction.

Reddit shares are down almost 40% this year, while Meta reported 33% revenue growth in its latest quarter and Reddit said in April that quarterly sales rose more than 60% for a seventh straight quarter.

Meta previously ran a standalone Facebook Groups app and shut it in 2017.

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🔗 Source: CNBC

🧠 Food for thought

Implications, context, and why it matters.

Reddit’s fast growth comes with mounting losses

Reddit’s sales jumped, yet its losses widened. The company recorded a net loss of US$484 million in 2024, up more than fivefold from a year earlier, even as revenue rose 61.5% 1. That risk was already on the table. Reddit’s initial public offering (IPO) prospectus said it “may never achieve profitability” 2. Its valuation dropped from US$10 billion in the last funding round before the IPO to US$7.8 billion by June 2024, a sign of investor doubt about the business over time 1.

Meta poses a wider platform challenge to Reddit

Meta’s new Forum feature goes after what Reddit is built for and could pull in casual Reddit users. With Facebook Groups, Meta already has a large audience and can offer a good-enough option that may draw attention and ad dollars away from Reddit. Reddit still has an edge in its 130,000 active subreddits, user-created discussion forums built around specific topics, plus a culture that a simple copy is unlikely to match 1. Meta also gives advertisers a familiar platform. That could make budget shifts easier if user overlap rises, especially for teams weighing a smaller standalone rival like Reddit.

Recent Reddit developments

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