Social media giant Reddit has added Bitcoin and Ether to its treasury, expressing belief in the significant potential of crypto and blockchain. Explore details in the IPO filing.
Social platform Reddit has been utilizing its surplus funds to acquire small quantities of Bitcoin (BTC) and Ether (ETH) for its treasury since the year 2022, demonstrating its belief in the promising potential of crypto and blockchain technologies, recent disclosures unveil.
Reddit disclosed in its initial public offering (IPO) filing with the United States Securities and Exchange Commission dated Feb. 22, "We have allocated some of our excess cash reserves into Bitcoin and Ether."
The disclosure highlighted that as of December 31, 2023, Bitcoin and Ether were the exclusive cryptocurrencies held in the firm's treasury, albeit in quantities deemed "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."
Moreover, Reddit elaborated on its exploration of blockchain technology, mentioning its acquisition of Ether and Polygon's MATIC as alternative forms of payment for specific virtual merchandise transactions.
The company noted that the amounts of Ether and MATIC acquired were also deemed "not material" throughout the years 2022 and 2023, yet it expressed intentions to potentially persist in utilizing these two cryptocurrencies for future transactions.
I was particularly intrigued by the appearance of a Reddit S-1 in one of my Bloomberg Alerts dedicated to tracking Crypto ETP filings. The reason? Reddit's recent investments in #Bitcoin and #Ethereum https://t.co/VS9M3Gslkf pic.twitter.com/oTB1xdrnXN
Reddit also mentioned that its product and engineering team currently holds cryptocurrencies for specific operational purposes, although it refrained from specifying the types or quantities involved.
Furthermore, Reddit expressed optimism regarding the potential of blockchain-related technologies but remained cautious about the uncertain future of widespread adoption among businesses and consumers.
"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."
The S-1 registration, a requisite for companies intending to go public, disclosed Reddit's net losses totaling $90.8 million in 2023, despite a 20.6% revenue surge to $804 million compared to the previous year.
Reddit, which was valued at $10 billion post its 2021 funding round, may now be evaluated at approximately half that valuation, according to a Jan. 28 Bloomberg report.
In a notable move, Reddit terminated its blockchain-based rewards system, "Community Points," in October, attributing scalability issues as the primary reason behind the decision.