Social media platforms Reddit (RDDT), ByteDance’s short-form video-sharing platform TikTok, and online image sharing website Imgur, are facing a probe by Britain’s Information Commissioner’s Office (ICO). The privacy watchdog is assessing whether these platforms comply with UK data protection laws, focusing on how they handle children’s personal information and protect them from harmful content.
The ICO is worried about the algorithms these companies use to personalize content. While these algorithms aim to boost user engagement, they can expose children to unsuitable content.
Specifically, the ICO is looking into how TikTok uses personal data of children aged between 13 and 17 years to personalize their content feeds. Also, Reddit and Imgur are under scrutiny for their age verification methods to ensure they effectively prevent underage users from accessing improper content.
How Is RDDT Stock Performing?
Reddit stock has dropped 25.3% since its Q4 earnings report on February 12. There are several reasons for this decline. Firstly, even though Reddit reported better-than-expected results, the number of daily active users fell short of Wall Street estimates, which disappointed investors.
Moreover, the U.S. Federal Trade Commission (FTC) is investigating Reddit and other tech platforms for their user banning policies. This regulatory scrutiny added to investor concerns.
Finally, Reddit faced a major global outage last week. Users in India and the United States had trouble posting comments, updating profiles, and loading their feeds.
Despite these challenges, Reddit’s international expansion efforts, new features rollout, and focus on AI are expected to aid long-term growth.
What Is the Price Target for RDDT?
Turning to Wall Street, RDDT stock has a Moderate Buy consensus rating based on 12 Buys, six Holds, and one Sell assigned in the last three months. At $207.06, the average Reddit stock price target implies 28% upside potential. Shares of the company have gained 181.2% over the past six months.
