LY vs Reddit: why the prices moved differently

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  LY outbids EQT for Kakaku.com with shareholder backing LY formally offered 3,384 yen per Kakaku.com share, topping EQT's 3,000 yen, and major holder Oasis agreed to tender its 19.52% stake. Winning Kakaku would add a profitable price-comparison and shopping site, lifting LY's growth story.

  The bidding war is the period's main new event and directly affects LY's acquisition prospects.

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  LY and Bain weigh even higher Kakaku bid LY and Bain are considering a fresh joint offer above EQT's 3,450 yen, and LY already raised its own price. Paying more raises the cash or debt needed and could dilute near-term returns, a real cost against the strategic benefit.

  Shows the counterweight: escalating price tags mean higher acquisition cost for LY.

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  Q1 revenue up 13.1%, profit up 23.1% LY reported quarterly revenue of 553.9 billion yen, up 13.1%, with adjusted EBITDA up 23.1% and margin at 28%. Media, Commerce and fintech all grew, and management said full-year guidance should be beaten, supporting the share price.

  Core earnings beat is the strongest fundamental driver for the stock this period.

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  PayPay allies with Seven & i to link payments and stores PayPay agreed a capital alliance with Seven & i, SoftBank and LY to connect its 75 million users with about 22,000 7-Eleven stores. This expands PayPay's reach into everyday shopping, a long-term growth driver for LY as a PayPay shareholder.

  New partnership extends PayPay's growth, a key value driver for LY.

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  AI ad tools drive revenue growth Reddit's AI-powered ad suite, Reddit Max, saw adoption jump over 60% from the prior quarter, with campaign revenue up more than 150%. This helped Q2 revenue grow 61% to $805 million and ad revenue rise 64%. The tools make ads more effective, attracting more advertisers and boosting sales.

  Shows a key growth driver that directly lifts revenue and investor confidence.

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  August user growth accelerates Piper Sandler reported Reddit's average users grew 8% month-over-month in August, the strongest this year, with total audience up 18% year-over-year. International users surged 29.3%. More users mean more ad inventory and engagement, which supports future revenue and the stock price.

  User growth is a core driver of ad revenue and was a major reason the stock jumped 7% on the news.

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  Court ruling strengthens data licensing A judge ruled that Anthropic is bound by Reddit's User Agreement, giving Reddit more control over how its content is used for AI training. This supports Reddit's ability to negotiate data licensing deals, a growing revenue source. It also sets a legal precedent that could boost future licensing income.

  This legal win directly supports a new revenue stream and strengthens Reddit's bargaining power with AI companies.

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  EU proposes social media ban for under-13s The EU plans to ban social media for children under 13 and require parental consent for 13-14 year olds, with fines up to 6% of global sales. Reddit could lose younger users and face compliance costs, potentially slowing user growth and hurting ad revenue in Europe.

  This is a new regulatory threat that could limit Reddit's user base and add costs, weighing on future profits.

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  S&P 500 inclusion completed Reddit joined the S&P 500 on August 18, forcing index funds to buy the stock. This creates a lasting base of new demand, though the initial price jump already happened. The bigger question is whether AI licensing deals will hurt Reddit's core ad business.

  This is the period's biggest capital event, directly affecting who owns and buys RDDT.

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  Meta's AI agent to browse Reddit Meta is preparing a consumer AI agent called Hatch that can access and browse Reddit. This validates Reddit's content as valuable for AI and could bring more users and engagement. The stock jumped 4.9% on the report, showing investors see it as a growth driver.

  This is a new, concrete AI partnership signal that directly lifts demand for Reddit's platform.

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  EU designates Reddit as VLOP The EU classified Reddit as a Very Large Online Platform, requiring it to assess and reduce risks like illegal content and harm to youth by end of December. This adds compliance costs and regulatory scrutiny, which can weigh on profits and investor sentiment.

  This is a new regulatory burden that could raise costs and limit how Reddit operates in Europe.

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  Reddit leads peers in Q2 growth Among 44 consumer internet stocks, Reddit posted the biggest earnings beat, highest guidance raise, and fastest revenue growth at 61%. Yet the stock fell 13.8% since reporting, showing a gap between strong business results and a still-cautious market.

  This highlights the core tension: excellent fundamentals versus a stock that hasn't fully rewarded them.

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  S&P 500 inclusion Reddit will join the S&P 500 on August 18, replacing AvalonBay. Index funds that track the benchmark must buy the stock, creating forced demand. Shares jumped about 12% on the news, giving the stock a major new source of buyers.

  This is the single biggest new event of the period and directly explains the recent price surge.

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  Extremely low valuation after 2026 selloff After falling 39% this year, Reddit trades at under 15 times next year's estimated earnings — its cheapest ever — despite 61% revenue growth and profits more than doubling. Value investors see a mismatch between the low price and fast-growing business.

  The valuation gap is a core reason the stock is bouncing and attracts new buyers.

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  Strong ad demand and AI ad tools Ad revenue rose 64% to $762 million, the eighth straight quarter of 60%-plus growth. Reddit Max, its AI ad suite, saw usage jump over 60% and revenue from those campaigns more than doubled. This shows advertisers are spending more on Reddit.

  It confirms the core business is still growing fast, supporting the bull case.

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  No new AI data deals announced Investors had bet Reddit would sign more AI data-licensing deals after its Google and OpenAI agreements. When the Q2 report brought no new deals, the stock plunged 22% — its worst day since going public — because that high-margin revenue was a key part of the bull case.

  This is the single biggest new driver of the period's selloff.

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  US daily user growth slows US daily active users rose just 6%, down from 7% the prior quarter, and missed the 54 million forecast. Since US users generate far more ad revenue than international ones, slower growth here worries investors about future ad sales even though total users grew 18%.

  The US user miss is the second core reason for the stock's drop.

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  Google search referrals stay choppy CEO Steve Huffman said traffic from Google Search remains volatile and visibility is low, as AI-generated answers reduce clicks to Reddit. This threatens both ad revenue and Reddit's leverage in the Google data-licensing standoff, adding uncertainty on top of the user slowdown.

  Search-referral weakness is a fresh, explicit concern that compounds the selloff.

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  Strong revenue and guidance, but not enough Q2 revenue rose 61% to $805 million, beating estimates, and Q3 guidance of $860–870 million topped the $829 million consensus. AI ad tools are drawing marketers. Still, the stock fell because investors focused on the user miss and missing AI deals, not the headline beat.

  This is the real counterweight — strong fundamentals that failed to offset the negatives.

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  AI data-licensing repricing optimism Reddit is pushing Google and OpenAI for higher, usage-based pricing on 2027 renewals, with analysts estimating combined licensing could reach $550 million. This potential revenue boost drove shares up 12% on July 1 and 5.7% on July 6, as investors bet on Reddit's leverage in AI data deals.

  This is the main new positive force behind the stock's move this period.

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  AI spam-detection progress Reddit's upgraded AI spam detection now catches 25,000 spam posts daily and cut user spam exposure by 20%, protecting data integrity that underpins licensing deals. This progress, reported July 6, reassured investors and contributed to a 5.7% share gain that day.

  It is a new development that supports the value of Reddit's data for AI licensing.

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  AI initiative drives user and revenue growth Reddit's AI tools are boosting engagement and ad performance: search weekly users rose 30% year over year, and AI ad tools cut cost per action by 17% while lifting conversions 25%. Management guided Q2 revenue to $715–$725 million, reinforcing the growth story.

  It shows the core business is benefiting from AI, supporting future revenue and the stock.

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  Google AI data deal standoff Reddit may rethink its $60 million-a-year Google AI data deal because Google's AI Overviews reduce traffic to Reddit. Shares fell 5.9% on July 22 as investors fear losing high-margin licensing revenue, though Reddit could also demand higher fees.

  This is the main new negative event that pulled the stock down and creates uncertainty.

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  Reddit's Q1 revenue beat stands out as shares gain 15.1% Reddit reported Q1 revenue of $663.4 million, up 69.1% year over year and beating estimates by 8.8%. While other social media stocks fell after earnings, Reddit shares rose 15.1%, showing investors see Reddit's growth as exceptional and likely pushing the stock higher.

  This is a major new earnings result that directly boosts investor confidence and the stock price.

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  UAE bans social media for children under 15 The UAE will prohibit under-15s from having social media accounts and require age verification and parental controls for teens. Reddit must comply within 12 months, raising costs and potentially limiting user growth and ad targeting in the region, which could weigh on the stock.

  This new regulation directly affects Reddit's operations and future growth in a key market.

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  Analyst says Reddit is undervalued despite AI fears An analyst argues Reddit is undervalued, with a fair value of $213 per share implying 22% upside. The stock is down over 25% in six months on AI disruption worries, but strong revenue growth, high margins, and a debt-free balance sheet support the bullish case, which could attract buyers.

  This new analyst view provides a valuation anchor and counters negative sentiment, potentially lifting the stock.

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  Reddit shares rise 7.9% on stronger ad demand and AI gains Reddit shares climbed 7.9% after the company reported stronger advertising demand, expanded its Shopify integration globally, and improved AI search citation performance. Analysts raised ad spend estimates, and the growing role in AI data licensing complements its core ad business, driving revenue growth expectations.

  This new development shows concrete business momentum that directly boosts revenue prospects and the stock price.

Based on 6 stories →