Reddit stock drops 6% after Meta announces a Facebook Groups app
u/FreshOutOfGeekistan ·
Reddit — r/stocks
· May 23, 2026 at 00:57
· ⬆ 91 pts
· 💬 49 comments
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AI Summary
Summary
Post reports Reddit stock dropped 6% after Meta announced Forum app for Facebook Groups, but author questions the competitive threat.
Author argues Facebook Groups have existed for years without hurting Reddit and notes Reddit is down 40% YTD despite 7 consecutive quarters of 60%+ sales growth.
Quality assessment: Light speculation with some data; not deep DD, but provides a contrarian viewpoint.
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Earlier today, META announced Forum, a standalone app for Facebook Groups. The Forum app is still being being tested (on Apple iOS). Facebook released an app for Facebook Groups in 2016 but discontinued it in 2017.
Some analysts report that the Forum app will be a competitive threat to reddit, because casual redditors "just looking for answers" will use the Forum app instead of reddit. This seems odd to me, because Facebook Groups have existed for 20 years as online venues for Facebook users to engage in topic-specific discussion groups, without impacting reddit. Also, they aren't Q&A sites per se. Sub-reddits aren't Q&A sites either, although they sometimes serve that purpose.
More interesting is that RDDT is down 40% so far in 2026, despite 7 quarters in a row of sales growth of 60% or more according to CNBC https://www.cnbc.com/2026/05/22/reddit-stock-drops-after-meta-launches-forum-app.html