Reddit Falls as Hedgeye Calls Short Idea, Sees 50% Slump (2)

Reddit Inc. shares notched their largest one-day drop since the social-media company’s trading debut after Hedgeye Risk Management released a report adding it as a short idea and saying it should fall about 50%.

The stock slipped 11% Wednesday to end the trading session at $57.75 a share, its lowest closing level since March 22. Reddit shares had been on a tear since the company’s March 21 initial public offering, gaining more than 90% to an all-time high close of $65.11 on Tuesday.

But according to Hedgeye, the stock is “grossly overvalued” and should trade closer to its IPO price ...