20 Large-Cap Stocks Insiders and Short Sellers Are Dumping Like Crazy

Page 18 of 18

1. Reddit, Inc. (NYSE:RDDT)

Short Float: 18.18%

Insider Transaction: -6.21%

Reddit, Inc. (NYSE:RDDT) is a social media platform that organizes content around user-generated communities known as subreddits. The company combines anonymity with topic-specific engagement, supporting diverse discourse from finance to entertainment. The 2024 IPO marked a significant milestone for this California-based company in monetizing user engagement through ads and data licensing. X and Discord hold a significant market share and, therefore, dominate Reddit, Inc. (NYSE:RDDT). However, the company’s strength lies in deep user interaction and niche communities, where advertisers could use the platform for targeted, organic reach.

The company achieved a 71% year-over-year growth in the fourth quarter of 2024. However, because of a $595 million accounting charge related to stock-based compensation, the company faced a significant loss of $484 million. The global daily active unique users increased to 101.7 million, contributing to the growth in revenue. That said, the number of users was still below the consensus estimate of 103.1 million. Also, Reddit, Inc. (NYSE:RDDT) has been experiencing volatility due to an algorithm change in Google Search. The new algorithm impacted the company’s search traffic, specifically from logged-out users. Furthermore, as the user base is still underdeveloped compared to peers, it affects the advertising revenue, which forms a significant part of the total revenue and hence translates negatively among investors.

Reddit, Inc. (NYSE:RDDT)’s short float stands at 18.18%, the highest on our list. Such immense skepticism prevails despite its recent IPO buzz. Meanwhile, insider selling is at -6.21%, hinting that key stakeholders are taking premature profits. This dual pressure signifies a lack of sustained investor confidence in the platform’s monetization capabilities.

Overall, Reddit, Inc. (NYSE:RDDT) ranks first among the 20 large-cap stocks insiders and short sellers are dumping like crazy. While we acknowledge the potential of these companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RDDT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 18 of 18