OpenAI CEO Sam Altman is set to make a ‘killing’ from Reddit IPO
Social media company Reddit on Thursday filed its IPO prospectus, nearly two years after submitting its papers confidentially. OpenAI CEO Sam Altman owns around 8.7% stake in Reddit and is likely to earn millions from the IPO of the San Fransisco-based company.
As Reddit is all set to hit the stock market in one of the biggest initial public offerings (IPOs) of the year, OpenAI Chief Executive Officer Sam Altman stands to make millions from the social media company's market debut.
Sam Altman holds a major stake in Reddit Inc, as mentioned in the regulatory filing of the social media company, mentioning its IPO plans.
In its IPO filing, Reddit has not disclosed proposed terms for the IPO, including its valuation. The details are likely to be released in the next filing of the firm.
According to Bloomberg, 38-year-old Altman holds around 8.7% of Reddit’s outstanding shares, as mentioned in the S-1, which was made public on Thursday. That includes 789,456 Class A shares and 11.4 million Class B shares. Reddit’s largest shareholder is Advance Magazine Publishers Inc., part of the Newhouse family publishing empire, with about a third of the voting power.
Bloomberg News has reported that Reddit has been asked to consider a valuation of at least $5 billion in its IPO launch. Based on the suggested valuation, reported by Bloomberg, Sam Altman's stake in the company is estimated to be worth $435 million.
Sam Altman and Reddit connection
Sam Altman has longstanding ties with the San Fransisco-based social media company. He had even handled the top executive role in Reddit for nearly a week. Altman and Reddit co-founders Steve Huffman and Alexis Ohanian were part of the inaugural class at the accelerator Y Combinator in 2005.
“Although my 8 days as the CEO of Reddit have been sort of fun, I am happy they are coming to a close,” he wrote, announcing the hiring of interim CEO Ellen Pao.
In its filing, Reddit said it is planning to expand its business in part through data licensing deals with artificial intelligence companies, in addition to working on its own AI products.
“Reddit’s vast and unmatched archive of real, timely, and relevant human conversation on literally any topic is an invaluable dataset for a variety of purposes, including search, AI training, and research,” Reddit co-founder and current CEO Huffman wrote in a letter included in the filing.
The company was founded in 2005 and had an average of 73.1 million daily active unique visitors in the fourth quarter. The company's net loss reduced to $90.8 million on revenue of $804 million in 2023, from a net loss of $158.6 million on revenue of $666.7 million a year earlier.
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