Recent weeks have been challenging for Reddit Inc., as its stock has plummeted by 50% since reaching a peak in February. The volatility in tech company stocks continues to exert pressure on the financial performance of many market players, and Reddit is no exception. This situation necessitates a detailed examination of the factors contributing to the stock decline and the company's future prospects.

On Monday, the United Kingdom's Information Commissioner's Office initiated an investigation into how TikTok, Reddit $RDDT and Imgur secure the privacy of minors. The inquiry focuses on evaluating current methods used to verify users’ age and prevent harmful content from reaching underage audiences. Maintaining data protection for young users remains a critical priority amid evolving global privacy standards.

Since going public last year, Reddit Inc. $RDDT has been at the center of attention due to its ambitions to monetize its unique content. On Wednesday, the company raised hopes for profitability, while investors are keenly watching its steps towards integrating artificial intelligence (AI) technology through licensing agreements. Reddit’s stock has shown phenomenal growth, making the company one of the most successful IPOs in recent years.