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Sam Altman’s Reddit Investment Surges to Over $600 Million Following NYSE Debut

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Sam Altman's Reddit Investment Surges to Over $600 Million Following NYSE Debut

OpenAI CEO Sam Altman has clarified that he holds no equity in the $80 billion artificial intelligence startup he co-founded in 2015. However, his ownership in Reddit presents a different scenario. After Reddit’s stock market debut on Thursday, Altman’s stake in the social media platform surged by $200 million, reaching a total value of over $613 million. The 19-year-old company saw its shares rise by 48% during New York Stock Exchange trading, closing at $50.44.

At 38 years old, Altman is one of the largest shareholders of Reddit, holding 7.6% of the outstanding shares following the offering, as stated in the company’s prospectus. His ownership ranks third, trailing behind only Advance Magazine Publishers, the parent company of Condé Nast, and the Chinese internet powerhouse Tencent. Similar to other company insiders, Altman is prohibited from selling his Reddit shares for a period of six months, known as the lockup period. Altman chose not to provide any comments on the matter.

Before OpenAI gained prominence in recent years, largely due to the success of its ChatGPT chatbot, Altman was primarily recognized as a startup investor and the former president of Y Combinator, a role he departed from in 2019. Altman’s investment portfolio features previous or current investments in companies like Airbnb, Uber, Instacart, Stripe, and Asana.

Reddit was among his significant investments. Altman served on the company’s board until approximately January 2022, when the company announced his recent resignation. In a blog post, Altman mentioned that he led Reddit’s $50 million Series B funding round in 2014, having used the platform daily for nine years. He described the website as “an example of something that started out looking like a silly toy for wasting time and has evolved into something very interesting.”

In 2021, amid a thriving tech market, Altman allocated a total of $60 million to Reddit across two financing rounds. Despite Thursday’s stock market surge, these investments have not yet yielded significant returns, as Reddit’s valuation remains below its previous peak in the private market. According to Reddit’s filing, Altman invested $50 million at a share price of $42.47 and an additional $10 million at $61.79 per share. Nonetheless, the funds he invested a decade ago have seen substantial growth.

This has somewhat alleviated the pressure on Altman to generate profits from OpenAI, where his leadership has been a subject of controversy for different reasons. Towards the end of last year, Altman was temporarily dismissed by the OpenAI board due to a loss of confidence in his leadership. However, he was reinstated a few days later following significant pressure from employees and investors. Recently, OpenAI announced that Altman would return to its board after the completion of an internal investigation conducted by the U.S. law firm WilmerHale into the circumstances surrounding his removal.

During a hearing with U.S. senators last May, Altman stated that he is not motivated by financial gain in his current role. According to filings, he received approximately $73,500 in total compensation in 2022. When questioned by Sen. John Kennedy, R-La., about his earnings, Altman responded, “I’m compensated enough to cover health insurance, and I don’t have any equity in OpenAI. I’m in this role because I’m passionate about it.”

About Vijendra

Vijendra
Vijendra has a master’s degree in Marketing and editor with passion. Exploring economic policies of different economies and analyzing geo-politics policies is of keen interest. In his free time he is a hardcore metal-rock and punk music fanatic.

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