The social media site — still up 200 per cent from its $34-per-share launch in March 2024 — has now shed nearly half its value since 7 February.

Bloomberg says it’s not just tech sector jitters but a darker cloud over Reddit itself. An earnings report last month showed it lagging behind the digital ad monsters at Meta and Alphabet’s Google, with fewer users and a shaky growth path.

Google also gave Reddit a slap in the face with a change to its search algorithm, affecting US traffic and rattling investors already jittery about Reddit’s dependence on Google. Short interest has ticked up, forecasts are sliding, and one analyst bluntly told punters to dump the stock.

Explosive Options’ analyst Bob Lang said: “It’s been super overvalued. Its growth rate is very strong, but they are still not making any money.

For all the IPO sizzle, Reddit posted a GAAP loss of $3.33 per share last year, even though the second half managed to turn a profit.

At its frothy February peak, Reddit’s shares had ballooned more than 500 per cent, fuelled in part by licensing deals that feed its content to AI firms. However, as enthusiasm for AI cools — and doubts arise about its long-term profitability — Reddit’s bet on training data gold appears somewhat thin.

The average analyst target has decreased from $207 to $195, which remains wildly optimistic given Thursday’s close, which left plenty of room for a further eight per cent drop. Add in a fresh outage that knocked out access for over 33,000 US users on Thursday — blamed on a buggy update — and the shine’s looking properly worn off.