Why Reddit Shares Are Trending Lower On Thursday?

Reddit Inc (NYSE:RDDT) stock is trading lower on Thursday. The decline follows a period of small executive stock sales, and broader market volatility is also pressuring the stock. Broader Market Weakness The social media platform faces headwinds from a declining tech sector. On Thursday, the Nasdaq dropped 1.35%. Similarly, the S&P 500 shed 0.99%. Reddit is underperforming these major indices today as all high-growth stocks are taking a beating, with investors rotating out of high-growth tech stocks. Insider Sales Impact Sentiment Recent SEC filings show insider selling by Reddit executives. Chief Technology Officer Christopher Brian Slowe sold 2,000 shares in a transaction executed on Thursday, totaling about $1.28 million at $74.60 per share. Earlier, Chief Operating Officer Jennifer Wong sold 5,660 shares in a deal executed Saturday, valued at approximately $5.62 million. Short Interest Data According to Benzinga, short interest in RDDT recently decreased. It fell from 18.47 million to 17.24 million shares. Currently, 14.65% of the company's float is held short. It would take 3.45 days for short sellers to cover their positions. Recent Company Context This pullback follows Wednesday's gains driven by legal news. A San Francisco judge tentatively sided with Reddit against Anthropic, where Reddit alleges the AI firm used user posts without a licensing deal. Technical Analysis Reddit is trading 9.4% below its 20-day simple moving average (SMA) and 33% below its 100-day SMA, keeping the intermediate trend pointed lower. Shares are up 6.25% over the past 12 months, but the stock is currently positioned closer to its 52-week low than its 52-week high. RSI is at 42.54, which sits in neutral territory. Meanwhile, MACD is at -5.7213 versus a signal line at -7.5601. Key Resistance: $147.50 Key Support: $111.00 RDDT Stock Price Activity: Reddit shares were down 8.79% at $127.36 at the time of publication on Thursday, according to Benzinga Pro data. Image via Shutterstock