Shares of Reddit (NYSE:RDDT) are down for the second day in a row as short-sellers reportedly target the stock.
The company's strong debut, which saw its shares jump significantly, is said to have drawn substantial bearish bets against the social media company in the first few days of trading.
Reddit shares hit a high of $74.90 on Tuesday this week. However, Wednesday's session saw its share price decline more than 11% to $57.75. As of 13:37 ET on Thursday, Reddit stock has declined a further 11.2%, trading around the $51.30 mark.
On Wednesday, it was reported by Reuters that a preliminary Ortex estimated that at least 7.1% of Reddit's free share float has been sold short, based on 2.15 million shares out on loan.
Many of the social media platform's users had already signaled their intentions to short the stock.
The Wednesday decline in Reddit shares was largely due to a report from Hedgeye Risk Management, which added it as a short idea and said it sees a potential 50% downside.