Reddit will make its much-anticipated debut on the New York Stock Exchange in March, and its initial public offering filed this week shows OpenAI CEO Sam Altman stands to make a fortune from the social media platform going public.
Reddit’s prospectus shows Altman is the third-largest shareholder in the company, owning 4.5% of its Class A shares and 9.3% of Class B shares, amounting to 9.2% voting power ahead of the IPO.
Altman has a long history with Reddit. He invested in the company while he was president of tech startup accelerator Y Combinator and worked briefly as Reddit’s CEO in 2014.
Altman became the CEO of OpenAI in 2020, and the Microsoft-backed artificial intelligence research lab grew in worldwide notoriety after its release of ChatGPT in November 2022.
Reddit was valued at $10 billion in a funding round in 2021, but it is unclear what valuation the company will aim for during its share sale in the coming weeks. It is expected to seek a sale of nearly 10% of its shares in the IPO, Reuters previously reported.
According to CNBC, Altman has invested at least $60 million in Reddit over the years, and he stands to net millions when the company goes public.
The IPO filing showed CEO Steven Huffman holds Class B common stock that is issuable upon achieving a vesting condition — that Reddit attains a $5 billion market capitalization valuation after the offering.
The social media platform is reportedly expected to hit the valuation target from the get-go.
Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, husband of tennis champion Serena Williams, Reddit has been backed by several marquee investors, from venture capital giant Andreessen Horowitz to China’s tech behemoth, Tencent Holdings.
Tencent is the second-largest shareholder in the company with 11.6% voting power, behind the Newhouse family’s Advance Magazine Publishers, which has a 34% controlling interest.
