Reddit, the popular social media platform, has revealed in its initial public offering (IPO) filing with the U.S. Securities and Exchange Commission (SEC) that it holds investments in bitcoin (BTC) and ether (ETH), marking a significant move into the realm of digital assets.
The company, known for its vast online communities, disclosed that it invested part of its excess cash in bitcoin and ether, joining the ranks of notable companies like MicroStrategy and Tesla, which have also made direct purchases of digital assets. Additionally, Reddit stated that it acquired ether and Polygon (MATIC) as a form of payment for sales of certain virtual goods and expressed its intention to continue this strategy in the future.
While the filing did not specify the exact amount of cryptocurrencies held by Reddit, it emphasized that the net carrying value of these digital assets was deemed “immaterial.” The company acknowledged the potential risks associated with holding cryptocurrencies, including exchange risk and additional tax, legal, and regulatory requirements.
Reddit’s decision to disclose its crypto holdings comes as part of its journey to become a publicly traded company. After years of preparation, the San Francisco-based firm expects to commence trading on the New York Stock Exchange under the ticker symbol “RDDT” in March.
Co-founder Steve Huffman emphasized the company’s mission and its desire for users to have a sense of ownership, stating, “Becoming a public company makes this possible.”
According to the IPO filing, Reddit reported $804 million in sales in 2023, a significant increase from the previous year, with total assets valued at $1.6 billion, including $1.3 billion in cash.
The news of Reddit’s crypto holdings led to a slight increase in bitcoin and ether prices before stabilizing. Additionally, the token associated with the r/ethtrader subreddit, DONUT, surged by 41% in response to the announcement.