After years of sitting on the sidelines, Reddit is finally moving ahead with its IPO—and some parties stand to see serious bank, while some names that you would expect to be among the beneficiaries are absent.
Reddit filed its S1 with the Securities and Exchange Commission (SEC) late Thursday, giving the public the first look at its plan to go public. (The company filed privately in December 2021, but shelved the plans after the market for IPOs became choppy.) Among the information was a look at who holds how much stock.
As always, there were some surprises. Here’s who holds what when it comes to the first social media company to debut on Wall Street in years.
Steve Huffman
Reddit’s sometimes controversial CEO will hold 368,954 Class A shares of the company (which convey one vote each on company matters) and 4,312,818 Class B shares (which have 10 votes each). While Reddit has not yet shared how it expects to price its stock when it begins trading, likely next month, that’s more than enough shares to ensure Huffman becomes a multimillionaire.
Jennifer Wong
Reddit’s chief operating officer, who was previously president of digital at Time Inc., has seen revenues double since coming on board in 2018. And she’s being rewarded for that. Wong holds 2,078,159 Class A shares.
Sam Altman
Seeing the head of OpenAI on the list of Reddit shareholders was something of a shock for many people. Altman was, in fact, CEO of Reddit in 2014, though only for eight days, and served on the board briefly in 2021. He holds 9.2% of the voting power currently and entities affiliated with him own 789,456 Class A shares and 11,369,103 shares—nearly three times as many as Huffman, who cofounded Reddit.
That sizable stake in the company makes it even more curious that Reddit struck a deal with Google—not OpenAI—on Wednesday to license its content for help training the search-engine company’s AI system.
Tencent
The Chinese gaming giant owns 11% of Reddit, following its $150 million investment in 2019. That caused an initial stir among Reddit users, but like other controversies on the site, it eventually died down. Tencent owns 1,127,422 Class A shares and 14,320,372 Class B shares, giving it an even bigger voice at the table than Altman.
Vy Capital
This investment fund might not sound familiar. That’s because it’s an under-the-radar investment firm based in Dubai that helped fund Elon Musk’s purchase of Twitter. Entities affiliated with Vy hold 5.5% of the voting power at Reddit and own 404,569 shares of Class A stock and 6,792,080 Class B shares.
Reddit users
Reddit reportedly plans to offer some 75,000 of its power-users and moderators the opportunity to buy IPO shares of the company. The number of shares it plans to offer those users remains undetermined. Ironically, in the “risk factors” area of the filing, the company also warned that those users could be problematic to the stock.
“Redditors’ participation in this offering could result in increased volatility in the market price of our Class A common stock,” it wrote.
Advance Magazine Publishers
The owner of Vogue and American City Business Journals is set to get a windfall from Reddit’s IPO, as it also owns Condé Nast, which bought Reddit in 2006, one year after the social media site was founded, for about $10 million. Since then, its stake has been diluted in subsequent investment rounds. Today, the Newhouse-family-owned company holds 16,182 Class A shares and 42,1919,092 Class B shares.
Alexis Ohanian
One name that was entirely absent from the S1 filing? Reddit cofounder Alexis Ohanian, who reportedly had a falling out with Huffman, his former college roommate, several years ago. Ohanian might own some shares of the company still, but it’s less than the 5% threshold that would have required Reddit to list his holdings.
He and Huffman relinquished their shares as part of the Condé Nast sale. Huffman regathered a financial interest in the company when he returned as executive chair, then CEO.
