Reddit yesterday (Feb. 22) officially filed its long-awaited initial public offering (IPO). The community-centric discussion forum will hit the New York Stock Exchange under the ticker RDDT sometime in March aiming a valuation around $5 billion, according to The New York Times.
Though Reddit’s target IPO valuation is only half what it was worth in a 2021 private financing round, a number of early founders and investors are expected to gain millions from the public debut.
Founded in 2005, Reddit is backed by institutional investors including Advance Magazine Publishers, FMR LLC, Quiet Capital, Tacit Capital, Vy Capital and Chinese tech giant Tencent. Cofounder and CEO Steve Huffman, OpenAI CEO Sam Altman (who is an early investor) and several senior executives also hold large chunks of company shares.
Last year, Reddit lost $90.8 million on a revenue of $804 million, according to its prospectus. The platform currently has more than 73 million daily users and 100,000 communities, the filing shows.
Here are Reddit’s top individual shareholders who stand to gain from the company’s public debut:
Former CEO Sam Altman owns 8.7 percent of Reddit worth $435 million
Altman is the Reddit’s third largest shareholder. He was a board member between 2015 and 2022 and even temporarily served as CEO in 2014. That same year, he led Reddit’s $50 million Series B funding round when he was president of the startup incubator Y Combinator.
Altman is also one of Reddit’s first users, signing up in 2005. “It’s always bothered me that users create so much of the value of sites like reddit but don’t own any of it,” he wrote in a blog post in 2014.
Cofounder and CEO Steven Huffman owns 3.3 percent of Reddit worth $165 million
In 2006, Huffman and his co-founder, Alexis Ohanian, sold Reddit to Condé Nast for $10 million and relinquished most of their equities before leaving the company in 2009. Huffman has since recaptured a substantial portion of shares, whereas Ohanian has said he only has a few shares left from his stint as executive chair of Reddit in 2014.
Huffman returned as CEO in 2015, replacing Altman. In 2020, Ohanian left Reddit’s board reportedly over disagreements with Huffman over hateful content on the platform.
COO Jennifer Wong owns 1.5 percent of Reddit worth $75 million
Wong is Reddit’s chief operating officer. She joined the company in 2018 from Time Inc., where she was president of digital. Wong is credited with scaling Reddit’s ad revenue to over $100 million within three years at the company.
CFO Andrew Vollero owns 1.7 percent of Reddit Class A shares
Vollero is Reddit’s chief financial officer. He joined the company in 2021 from Snapchat’s parent company Snap. He was Snap’s first CFO and was instrumental in taking the social media company public in 2017.
Reddit has six non-employee board directors who collectively own a sizable chunk of the company
- Michael Seibel owns 120,000 Class A shares and 31,697 Class B shares
- Porter Gale owns 111,331 Class A shares
- Patricia Fili-Krushel owns 7,990 Class A shares
- David Habiger owns 5,147 Class A shares
- Robert Sauerberg owns 47,087 Class B shares
- Steven Newhouse holds 30.1 percent of Reddit’s outstanding shares through Advance Magazine Publishers, Reddit’s largest shareholder. Newhouse is co-president of Advance.
Select loyal “redditor” get early access to Reddit shares
In an unusual move, Reddit will allow 75,000 of its users to buy shares at its opening price using a tiered system that rewards those who have “meaningfully contributed to Reddit community programs,” according to the prospectus. “We hope going public will provide meaningful benefits to our community as well,” CEO Huffman said in a statement yesterday.
