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News: Reddit has officially filed a prospectus document for its upcoming initial public offering (IPO) with the US SEC, with the dual intention of being listed on the New York Stock Exchange (NYSE) and investing excess funds in Bitcoin and Ethereum.
Let’s see below all the details.
Summary
Reddit reveals investment plans in Bitcoin and Ethereum: news on the IPO project
As anticipated, Reddit has stated that it will allocate excess funds to investments in Bitcoin and Ethereum, a commitment reiterated in a recent filing with the Securities and Exchange Commission (SEC).
In the document, Reddit exposes its activity of holding cryptocurrencies and exploring the blockchain technology, emphasizing the potential legal, tax, and regulatory risks associated with such operations.
The filing also reveals that Reddit has acquired Ether and Matic as payment methods for the sale of virtual goods, highlighting the intention to continue such practices.
The company specifies that these digital assets are acquired for internal use, intended for product and engineering teams.
Reddit clarifies that as of December 31, 2023, its holding of digital assets was limited to Bitcoin and Ether for treasury purposes, following a policy that requires approval from the board of directors for any investment in cryptocurrencies.
The document specifies that investments in cryptocurrencies include Bitcoin, Ether, and other cryptocurrencies that enjoy positive recognition from regulatory authorities.
The deposit highlights Reddit’s adherence to the growing trend of adoption of cryptocurrencies and blockchain technology, while also emphasizing the uncertainty about their long-term continuity in terms of adoption by consumers and businesses.
Despite the document not providing details on the specific amount of digital assets held by Reddit, it seems that the company has no intention of slowing down its investments in cryptocurrencies, especially in Bitcoin and Ethereum.
The recent launch of Bitcoin ETFs in the United States at the beginning of 2024 seems to further strengthen Reddit’s position in this sector.
It was also revealed in 2023 that the co-founder of Reddit, Alexis Ohanian, had purchased 50,000 ETH in 2014, an investment that has seen a significant increase in value over time.
Filing the S-1 form for the IPO
On Thursday, Reddit officially filed its initial public offering (IPO) prospectus with the Securities and Exchange Commission (SEC), planning to list on the New York Stock Exchange (NYSE) under the symbol “RDDT”.
The social media company had initially confidentially filed a draft registration statement at the end of 2021, during a period marked by a wave of other IPOs.
However, the market for public listings has undergone a significant contraction, dropping from 1,035 IPOs in 2021 to 181 in 2022 and 154 in 2023.
In its S-1 form, Reddit disclosed an annual revenue of $804 million in the last year of its IPO, marking a 21% increase compared to the previous year.
However, despite these positive results, the company continues to report a net loss of 90.8 million dollars in 2023, highlighting the challenges on the road to profitability.
Reddit, which relies mainly on advertising sales for revenue, has emphasized the vast market opportunity in digital advertising, estimating a value of 1 trillion dollars (excluding China and Russia).
It is expected that this sector will grow at a compound annual rate of 8%, reaching $1.4 trillion in 2027, according to data from S&P Global Market Intelligence.