Sam Altman, OpenAI CEO, Set to Cash In on Reddit IPO
OpenAI CEO Sam Altman is poised to make a substantial profit from Reddit’s highly anticipated initial public offering (IPO), which is expected to be one of the biggest of the year. According to regulatory filings by the social media company, Altman holds a significant position in Reddit Inc., a detail that highlights its aspirations for an IPO.
While Reddit has not disclosed any specifics about its IPO, including valuation, these details are expected to be revealed in the company’s forthcoming filing. However, according to Bloomberg, Altman owns approximately 8.7% of Reddit’s outstanding shares. The S-1 filing, made public on Thursday, states that Altman possesses 789,456 Class A shares and 11.4 million Class B shares.
The largest shareholder in Reddit is Advance Magazine Publishers Inc., a part of the Newhouse family publishing business. They hold roughly one-third of the voting power in the company. Bloomberg News suggests that Reddit could potentially be valued at $5 billion for its IPO. Based on this estimate, Altman’s stake in the company would be worth around $435 million.
The connection between Sam Altman and Reddit runs deep. Altman has had a long-standing relationship with the San Francisco-based social networking startup, having been one of the first participants in the Y Combinator accelerator program in 2005 alongside Reddit co-founders Steve Huffman and Alexis Ohanian. In fact, Altman even briefly served as CEO of Reddit for eight days before announcing the appointment of temporary CEO Ellen Pao.
In its recent filing, Reddit stated its intention to expand by entering into data licensing agreements with artificial intelligence (AI) businesses and developing its own AI products. The company believes that its vast and diverse collection of real-time human conversations on various topics is an invaluable dataset for purposes such as search, AI training, and research. Reddit’s co-founder and current CEO, Steve Huffman, emphasized this point in a letter accompanying the filing.
Despite being created in 2005, Reddit continues to experience significant growth. In the fourth quarter of last year, the platform recorded an average of 73.1 million daily active unique visitors. In 2023, Reddit’s net loss decreased to $90.8 million, while its revenue increased to $804 million, up from $158.6 million and $666.7 million, respectively, the previous year.
With Sam Altman’s substantial stake in Reddit and the company’s potential valuation of $5 billion, it is clear that Altman stands to earn a significant windfall when the IPO takes place. As one of the biggest IPOs of the year, Reddit’s public offering will undoubtedly attract attention from investors and industry observers alike.
References:
– CTN News: “Sam Altman, OpenAI CEO, Poised to Earn Big with Reddit IPO”
– Bloomberg: “Reddit Has Been Asked to Contemplate a $5 Billion Valuation”
– Bloomberg: “Sam Altman’s Reddit Stake Worth $435 Million Ahead of IPO”
– Bloomberg: “Reddit to Expand Using AI Deals, Build Its Own Products”
– Bloomberg: “Reddit Had 73.1 Million Active Users in Fourth Quarter”