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Fidelity Cuts Reddit Valuation by 41%

Fidelity Investments has slashed its valuation of Reddit by 41%, according to a recent filing with the Securities and Exchange Commission. The investment firm now values Reddit at $39.65 per share, down from $61.79 per share in September 2021.

The decline in Reddit's valuation is part of a broader sell-off in technology stocks. The Nasdaq Composite index, which is heavily weighted toward technology stocks, has fallen by more than 20% since the start of the year.

Reddit's valuation has also been hurt by concerns about its ability to grow its user base and monetize its advertising business. The company has struggled to attract new users in recent months, and its advertising revenue has not grown as quickly as investors had hoped.

Despite the recent sell-off, Reddit remains a popular social media platform with more than 500 million active users. The company has also made progress in monetizing its business, and it is expected to generate $100 million in revenue this year.

However, it remains to be seen whether Reddit can sustain its growth and profitability in the long term. The company faces stiff competition from other social media platforms, and it will need to find new ways to attract users and advertisers.

What does this mean for Reddit?

The decline in Reddit's valuation is a setback for the company, but it is not a death sentence. Reddit has a strong user base and a talented team, and it has the potential to grow its business in the long term. However, the company will need to address its challenges and make some changes in order to achieve its full potential.

What does this mean for investors?

The decline in Reddit's valuation is a warning sign for investors. The company's growth prospects are uncertain, and its valuation is now below its previous funding round. Investors should carefully consider the risks before investing in Reddit.

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