Sam Altman’s stake in Reddit surpasses $1 billion after earnings boost
Nickie Louise
Posted On October 30, 2024
Reddit shares surged 22% in extended trading on Tuesday, hitting $100 for the first time after the company posted third-quarter earnings that exceeded analyst expectations and issued an optimistic outlook. This rally has made OpenAI CEO Sam Altman one of the biggest gainers; his Reddit stake now exceeds $1 billion.
As we reported in March, early Reddit investor Sam Altman, who holds roughly 12.2 million shares, first backed the platform over a decade ago. As of Tuesday’s after-hours price of $98, his holdings are valued at about $1.2 billion. According to CNBC, Altman is Reddit’s third-largest shareholder, holding 4.5% of Class A shares and 9.3% of Class B shares, giving him about 9.2% of voting power ahead of the company’s IPO.
Best known today for leading OpenAI since the release of ChatGPT, Altman has a history of high-profile investments in companies like Airbnb, Uber, Instacart, Stripe, and Asana. Reddit, however, has been one of his most significant investments. He served on Reddit’s board until early 2022, stepping down shortly before the company’s IPO.
Reddit went public in March, priced at $34 a share. During a tech boom in 2021, Altman invested $60 million in the company through two funding rounds, according to the company’s IPO filings. Following the IPO, top shareholders were restricted from selling shares until September, and there’s no indication that Altman has offloaded any of his stock.
Earlier this month, OpenAI closed a funding round at a $157 billion valuation, having raised $6.6 billion from various investors. Despite OpenAI projecting $3.7 billion in revenue for 2024, CNBC reported that losses could reach $5 billion. Altman told employees he doesn’t plan to take a major equity stake in the company.
Altman’s connection with Reddit runs deep; he invested during his time as president of Y Combinator and briefly held the CEO role at Reddit in 2014. Since taking the helm at OpenAI in 2020, he’s become a central figure in AI innovation, especially following ChatGPT’s debut in November 2022.
Reddit’s valuation, at $6.4 billion after its IPO, marked a significant dip from its $10 billion valuation in 2021. Advertising remains a major revenue source, yet the company has been promoting AI as a growth avenue. However, Reddit recently disclosed that the FTC is investigating its AI data licensing agreements, adding to the scrutiny.
Founded 19 years ago by Alexis Ohanian, Reddit has grown into a major social media platform with billions of monthly visits. As it approaches the one-year mark since going public, Reddit’s journey exemplifies the adaptability and impact of tech startups amid rapid digital innovation.
