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By Brenda Ngari - February 23, 2024
Social media platform Reddit has made headlines with its decision to invest part of its excess cash in Bitcoin (BTC) and Ethereum (ETH), as revealed in a Feb. 22 S-1 filing with the Securities and Exchange Commission (SEC). The crypto investments make Reddit one of the few companies that hold crypto assets in their balance sheets alongside the likes of Elon Musk’s EV maker, Tesla, and Michael Saylor’s MicroStrategy.
Reddit has officially filed to go public on the New York Stock Exchange under the ticker RDDT.
In a filing for an initial public offering (IPO), the firm disclosed that it has invested its excess cash reserves in crypto assets, including Bitcoin (BTC) and Ether (ETH), and has also acquired Polygon’s MATIC to pay for virtual goods. The social media giant said it may continue this strategy in the future.
Reddit indicated that BTC and ETH were the only cryptocurrencies held in the company’s treasury as of Dec. 31, 2023. It did not reveal how many tokens it holds but said the amounts are “immaterial.”
“The net carrying value of our cryptocurrencies, which consisted primarily of Bitcoin and Ether, as well as all related cryptocurrency activity, was immaterial for the periods presented,” Reddit wrote.
Moreover, the firm said it holds these cryptocurrencies so that its engineering and product teams can use them for specific applications.
In the S-1 filing, Reddit said it has been “experiment[ing] with blockchain technology”.
The firm also said it sees some huge potential in cryptocurrencies and blockchain-based technologies but isn’t sure whether adoption by businesses and users will continue:
“While we believe cryptocurrencies and blockchain technology have significant potential, the popularity and prevalence of cryptocurrencies is a relatively recent trend, and whether cryptocurrencies and blockchain technology will continue to be adopted by consumers and businesses in the long term is uncertain.”
Reddit has cozied up to the crypto asset space in the past: In 2020, the platform launched Moons and Bricks — tokens running on Ethereum’s blockchain. Those who contributed to the cryptocurrency section of the social media site could receive Moons or Bricks as rewards and spend them for specific benefits. But Reddit pulled the plug on the blockchain-based reward service in November, citing problems with scalability and regulation.
While the social community platform reported roughly $804 million in sales in 2023, a decent 20.5% year-on-year increase, profitability remains somewhat of a pipe dream with a net loss of $91 million. The San Francisco-headquartered firm expects to commence trading on the NYSE in March.
DISCLAIMER
The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.
The original article written by Brenda Ngari and posted on ZyCrypto.com.
Article reposted on Markethive by Jeffrey Sloe
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