Reddit Reveals Investment in Bitcoin and Ether in IPO Filing

Reddit, the popular social media platform, has made headlines after revealing in its IPO filing that it has invested some of its excess cash in bitcoin (BTC) and ether (ETH), as well as acquiring Polygon (MATIC). The San Francisco-based company is aiming to be listed on the New York Stock Exchange in March under the ticker “RDDT.”

This move makes Reddit one of the few companies that have directly purchased digital assets, joining the likes of Michael Saylor’s MicroStrategy and Elon Musk’s Tesla. The company disclosed in its filing with the U.S. Securities and Exchange Commission (SEC) that it invested part of its excess cash in bitcoin and ether, and also acquired ether and Polygon (MATIC) as a form of payment for sales of certain virtual goods. Reddit stated that it may continue this strategy in the future.

While the firm did not disclose the exact amount of tokens it holds, it mentioned in the filing that the net carrying value of the digital assets was “immaterial.” The company acknowledged the risks associated with holding cryptocurrencies, including exchange risk and additional tax, legal, and regulatory requirements.

The decision to invest in digital assets comes after a years-long process with regulators to become a publicly traded company. Reddit first filed a non-public draft with the SEC in December 2021 and expects to begin trading in March. Co-founder Steve Huffman stated in the filing that going public will help advance the company’s mission and allow users to have a sense of ownership over the platform.

According to the filing, Reddit reported $804 million in sales in 2023, a significant increase from the previous year. The company also disclosed that it has a total of $1.6 billion in assets, including $1.3 billion in cash. The news of Reddit’s holdings in bitcoin and ether caused a slight bump in prices before they pared their gains. Additionally, the Reddit-related token DONUT, which represents the community points of the r/ethtrader subreddit, surged 41% on the news.

Overall, Reddit’s decision to invest in digital assets and go public reflects the company’s commitment to innovation and growth in the rapidly evolving cryptocurrency market. As the company prepares to list on the New York Stock Exchange, all eyes will be on how its holdings in bitcoin, ether, and Polygon will impact its future performance and valuation.