No, Sam Altman doesn't actually own half a billion dollars of Reddit stock

• Reddit filed for an IPO, revealing nearly 10% of its shares are owned by entities related to Sam Altman.
• Many news outlets assumed Altman owned all $435 million in stock, but the fine print tells another story.
• Here's about how much of Reddit the OpenAI CEO actually owns and how much that could be worth.

Last week, not long after Reddit made moves toward a public listing, headlines began to appear about an unexpected figure: Sam Altman.

Altman, tech's most in-vogue wunderkind and the CEO of OpenAI, owned nearly 9% of Reddit, multiple outlets, including Business Insider, reported. If Reddit were to hit the market at its target price of $5 billion, his stake would be worth an eye-popping $435 million, certain publications extrapolated.

But a closer read of Reddit's S-1, the document a company files to the Securities and Exchange Commission when it plans to go public, shows that's not exactly accurate. While Altman does likely own enough Reddit stock — he's invested in the company, served on its board, and was even its CEO for an eight-day stint — to make any layperson rich, he doesn't appear to own anywhere near what the headlines proclaimed.

According to the cap table in Reddit's filing, "Entities Affiliated with Sam Altman" own an 8.7% stake in the company made up of 789,456 Class A shares and 11,369,103 Class B Shares. But just because the shares are affiliated with Altman doesn't mean they are his.

In fact, the document clearly states that "Altman disclaims beneficial ownership of these shares except to the extent of his respective pecuniary interest therein."

"This is a legal distinction indicating that while he has control over the voting and dispositive control over these shares, he does not necessarily have a direct economic interest in them, except to the extent that he may benefit financially," Chris Harvey, a venture capital fund attorney at Harvey Esquire APC, told Business Insider over email.

A footnote in the document explains that those shares are divided among five different entities: Apollo Projects SPV-B, Altman Holdco, Apollo Projects, Apollo Projects SPV-A, and Hydrazine Capital II.

These entities represent different types of funds: Hydrazine Capital II is a venture fund, for example, while SPV is short for special purpose vehicle and is a subsidiary of a larger fund.

All of the entities other than Altman Holdco, which is an LLC, must file Form ADVs, a type of disclosure form. A look at the forms reveals that Altman is not the sole or majority owner of these entities' holdings. He's listed as a "related person" — in these cases, an investment advisor. At most, he owns 5% of Hydrazine's holdings and 15% of Apollo's. The rest presumably belongs to the funds' limited partners, whose identities are not known in these cases.

The way this shakes out means he owns significantly fewer shares than has been reported. For example, Hydrazine Capital II is listed as owning nearly 9.9 million shares of Reddit. But Altman, at most, owns 5% of Hydrazine Capital II's holdings, or 492,720 of its Reddit shares.

Applying the logic to the other entities, BI estimates that Altman's Reddit stock outside of Altman Holdco is worth at most about $25 million based on a $5 billion target IPO valuation. If he is the sole owner of Altman Holdco's 965,128 shares — which can't be determined — that would be another $34.5 million. Based on a $5 billion valuation, his total Reddit equity would be worth, at most, about $60 million. It's a substantial sum but a far cry from the $435 million making headlines.

Altman's representative did not respond to requests for comment from Business Insider, and a spokesperson for Reddit declined to comment.

The various entities point to a side of Altman — Altman the investor — that has receded from view since he has become known to the public as OpenAI's CEO.

Over more than 15 years, Altman has made over 155 investments, according to Pitchbook data. These include investments through advisory firms, of which Altman is the managing director of five, according to Form ADVs filed with the SEC. These include venture fund Hydrazine Capital and Apollo Projects, which he started with his brothers. Investors in his various vehicles reportedly include The University of Michigan and billionaire venture capitalist Peter Thiel.

Between 2014 and 2019, the 38-year-old led startup accelerator Y Combinator, where he oversaw the selection process for the prestigious incubator's startups. His investments in that capacity included Cruise, Helion Energy, and Boom Supersonic.

It's at Y Combinator — as the cofounder of a startup called Loopt, not as its president — that he first met Steve Huffman and Alexis Ohanian, the Reddit cofounders.

"I have been a daily reddit user for 9 years—longer than pretty much any other service I still use besides Facebook, Google, and Amazon," Altman wrote in 2014, announcing an investment in the company. "I was probably in the first dozen people to use the site, and I shudder to imagine the number of hours I have spent there."

Whether $435 million or $60 million, it's fair to say that time is paying off.