425: Fold App CEO and FTAC Emerald Discuss Merger, Bitcoin Strategy in Reddit AMA

Fold App and FTAC Emerald executives discussed their upcoming merger, Fold's Bitcoin strategy, and the company's future plans in a Reddit AMA session.

Summary

• FTAC Emerald Acquisition Corp. is merging with the Fold App, a platform that allows users to earn Bitcoin on purchases and savings.
• The merger aims to bring Fold to the public markets, capitalizing on the growing interest in Bitcoin.
• Fold has a strong community and has given away over $70 million in Bitcoin to its customers.
• The company holds over 1,000 Bitcoin in its treasury, valued at approximately $100 million.
• Fold's valuation was set at $381 million in July, but the deal includes a formula to account for the increase in Bitcoin's value.
• The company plans to increase marketing investments by 12x in 2025 and has partnerships to scale to millions of users.
• Fold aims to be a leader in Bitcoin financial services, focusing on long-term savings rather than short-term speculation.

Sentiment

Score: 8

Explanation: The document presents a very positive outlook for Fold, highlighting its strong community, innovative product, and strategic position in the growing Bitcoin market. The management team is experienced and confident, and the company has a clear plan for future growth. However, there are some risks associated with the merger and the volatility of Bitcoin, which temper the overall sentiment.

Positives

• Fold has a strong and loyal community that has helped inform the product development.
• The company has a first-mover advantage in the Bitcoin rewards space.
• Fold has a diverse customer base across all 50 US states.
• The company has a Bitcoin treasury of over 1,000 Bitcoin, providing a strong balance sheet.
• Fold has positive unit economics on all of its products, meaning every new user and dollar is accretive to the business.
• The company has partnerships in place to scale to millions of users.
• Fold is positioned to benefit from the increasing adoption of Bitcoin and the recent surge in its price.
• The company has a large customer base of over 600,000 users.

Negatives

• The merger is still pending SEC approval, and the exact closing date is uncertain.
• FTAC Emerald's stock may be subject to delisting from NASDAQ due to a three-year rule, requiring a migration to the OTC market before relisting.
• The company has not yet achieved profitability, but expects to reach it in the near future.
• The company has relied on organic growth and referrals, and is now planning to increase marketing investments.

Risks

• The merger may not be completed in a timely manner or at all.
• The company may not be able to maintain its listing on the NASDAQ.
• The company may not be able to achieve its revenue and growth targets.
• The company operates in a highly competitive and rapidly changing industry.
• The company's performance is subject to the volatility of Bitcoin prices.
• The company may face legal proceedings related to the business combination.

Future Outlook

Fold is optimistic about its future growth, expecting to benefit from the increasing adoption of Bitcoin and its own strategic initiatives. The company plans to expand its product offerings, increase its customer base, and leverage its Bitcoin treasury to drive growth and profitability.

Management Comments

• Betsy Cohen stated that she was attracted to Fold because of its understandable and growing business and good executives.
• Will Reeves emphasized that Fold is the easiest way to start a Bitcoin journey, allowing users to earn Bitcoin passively.
• Will Reeves stated that Fold has built a platform for long-term financial wellbeing, not short-term gambling.
• Betsy Cohen stated that the company is pursuing every strategy to avoid the navigation back and forth to OTC.

Industry Context

The merger comes at a time of increased interest in Bitcoin and cryptocurrency, with the price of Bitcoin recently surpassing $100,000. This merger positions Fold to capitalize on the growing demand for Bitcoin-related financial services and compete with other companies in the space.

Comparison to Industry Standards

• Fold is being compared to companies like Coinbase and Robinhood, but it differentiates itself by focusing on long-term savings rather than short-term speculation.
• Unlike Affirm, which is a financial services company that focuses on strategies for purchasers, Fold focuses on Bitcoin rewards and long-term savings.
• Fold is also taking inspiration from MicroStrategy's Bitcoin accumulation strategy, but it also has an operating business that generates Bitcoin daily.
• The company is aiming to be a leader in Bitcoin financial services, similar to how The Bancorp became the most important online bank.

Stakeholder Impact

• Shareholders of FTAC Emerald and Fold are expected to benefit from the merger and the potential growth of the combined company.
• Customers of Fold will continue to benefit from the company's Bitcoin rewards program and new product offerings.
• Employees of Fold will have the opportunity to work for a public company with significant growth potential.

Next Steps

• The company will continue to work towards completing the merger with FTAC Emerald.
• The company will seek SEC approval for the merger.
• The company will hold a meeting for voting on the merger.
• The company will migrate to the OTC market if necessary and then relist on NASDAQ.
• The company will increase its marketing investments by 12x in 2025.
• The company will continue to develop and launch new products.
• The company will continue to build its Bitcoin treasury.

Key Dates

Keywords

Bitcoin, Fold App, SPAC, FTAC Emerald, Merger, Cryptocurrency, FinTech, Rewards, Public Listing, Investment