We recently compiled a list of the 20 Large-Cap Stocks Insiders and Short Sellers Are Dumping Like Crazy. In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against the other large-cap stocks.
Uncertainty is around every corner of the U.S. stock market, affecting investors’ decisions. With President Trump’s return to the Oval Office, the market, heavily influenced by his policies, is flashing unmistakable warning signs. Short sellers and insiders are making an aggressive exit from multiple large-cap stocks. These groups are more plugged into market sentiment than the average investor, so their abandonment of stock must be looked into more closely.
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According to a CNBC report, the market indices are on track to log their worst performance in the first 100 days of a presidency since Richard Nixon’s second term as U.S. President. Meanwhile, internal selloffs are experiencing an upward trend in the market alongside bearish bets. Every day, investors wonder whether to stay put or jump overboard.
Concerning the current market situation, Cleveland Fed President Beth Hammack pointed out in a recent interview that businesses are growing increasingly wary. Because of tariff concerns and policy instability, they are holding back on investments and hiring. Such hesitation is reflected in insider behavior.
Insiders, including corporate executives, board members, and major shareholders, must report their trades. In addition, in their recent filings, a troubling pattern is noticeable: they are selling more and buying less. The livelihoods and wealth of insiders are often tied directly to the company’s performance. Hence, selling shares instead of purchasing them could be seen as their way of locking in gains before tough times hit their company.
Parallel to this pattern, short sellers are also ramping up their activity. They are betting on a wave of economic uncertainty pushing down share prices. These are not moves made on a whim but stemming from a more profound structural concern regarding an organization.
Due to the current environment, the Treasury yields are climbing, and the U.S. dollar is weakening. Consequently, the prices of stocks, even the large market caps, are swinging wildly. The Federal Reserve is expected to hold interest rates steady in May and cut them later in June. Though this may seem advantageous, corporate earnings may still be pressured by higher costs and lower consumer demand, resulting in a negative outlook for equities, particularly the overvalued ones. And with their recent activities, insiders and short sellers are positioning themselves to use the opportunities to exit rather than re-enter.
According to analysts, it is not about pulling your investments by following the insiders and short sellers. Instead, it’s about understanding what is going on in the market and using the knowledge to make informed decisions about your portfolio. Historically, the exit of those closest to the financials and forecasts often precedes market corrections. By paying attention to these movements, investors can elevate the resilience of their stocks as well.
Our Methodology
We followed multiple criteria when compiling our list of the top 20 large-cap stocks being dumped by insiders and short sellers. We selected the large-cap stocks based on their market cap and stock volume. Only the companies with a market cap between $10 billion and $200 billion were included in this list since anything more would be mega-cap, and anything less is regarded as small-cap or mid-cap. Concerning stock volume, we have disregarded companies with a volume of less than 500,000. We have set the short-float limit as 5% or more to ensure that our list is made up of picks involving high bearish bets. We have included those stocks with a negative insider transaction in terms of insider selling since this signals a negative outlook for the company’s future performance. The stocks are ranked according to their short percentage of float. All the data in the article was taken from financial databases and analyst reports, with all information updated as of April 30, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A content marketing website showing the audience reach of the company’s products.
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 RDDT ranks 1st among our list of the large-cap stocks insiders and short sellers are dumping like crazy. While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.