Reddit stock drops almost 6% after Meta launches standalone app for online forums

Key points

• Reddit shares fell almost 6% on Friday on concern that a new app from Meta called Forum could create an alternative avenue for internet users to congregate and create discussion groups.
• Forum, launched as a test app on Apple's iOS, is part of Facebook Groups.
• Analysts at Truist wrote in a note on Friday that it's "an attempt by the company to compete against Reddit as an online forum for public discourse" and "represents a new threat." Reddit's stock is now down almost 40% this year despite a strengthening online ad business.
• In April, the company reported its seventh-straight quarter of sales growth topping 60%.
• Meta, meanwhile, reported revenue growth of 33% in the latest quarter.