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Reddit cofounders Steve Huffman and Alexis Ohanian spent about eight straight years living together, initially as college roommates, playing World of Warcraft late into the night and later working together on the foundations of the discussion forums service now frequented by nearly 270 million people. But that history was missing from Reddit’s sales pitch to investors published Thursday announcing its plans to go public on the New York Stock Exchange: Reddit’s filing with the US Securities and Exchange Commission didn’t mention Ohanian at all.
Huffman, who has been Reddit’s CEO since 2015, and Ohanian, who after stepping back from helping run the business had sat on its board for years, split in 2020 over how to handle some of the hateful content on Reddit. They’ve spoken little since. The lack of a nod to Ohanian in the new document could reflect both that schism and Huffman’s attempt to cast a company that’s been around for 19 years in a new light.
Disputes among startup cofounders are common, and not every investor pitch recounts the minutiae of a company’s history. But the gregarious Ohanian had been the public face of Reddit during its formative years and to early users was a kind of spiritual leader who shaped the community’s culture while Huffman worked on the code. Some users still closely associate Reddit with Ohanian and long for his involvement. But Huffman has held the reins in more recent history and has led work on developing potential paths to consistent profits that he and Ohanian never could envision in the early days.
The new sales pitch filed with the SEC, known as a Form S-1, allows Reddit to debut on the stock market with the ticker symbol RDDT as soon as next month.
Reddit and Ohanian didn’t immediately respond to requests for comment. In a post on X on Thursday, Ohanian, who now runs venture capital firm SevenSevenSix wrote, “Pretty wild seeing $RDDT going public after all these years. Founders, keep going.”
In the S-1, Huffman offers a brief look at Reddit’s beginnings, without naming his cofounder. “I think of August 13, 2005 as the day Reddit really came to life,” Huffman says. “We had been online for a couple of months, but until then there had never been enough posts from users on any day to fill the front page. That morning, to my surprise, I opened Reddit to discover the home page was overflowing with posts from real users for the first time.”
The filing also lists the number of Reddit shares owned by executives or people who individually own more than a 5 percent stake in the company. Ohanian isn’t listed because he and Huffman sold Reddit to Condé Nast (WIRED’s parent company) for about $10 million in 2006, a little over a year after founding it, relinquishing their ownership. They both left the company altogether in 2009.
Since returning to become CEO, Huffman has accumulated shares totaling 3.3 percent of Reddit, according to the S-1. Ohanian said in a separate X post on Thursday that he still has some shares from when he was executive chair of Reddit about a decade ago.
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Advance, the owner of Condé, owns 30 percent of Reddit with other investors, board members, and employees holding the rest. Among them, OpenAI CEO Sam Altman, an early user and investor in Reddit, has 8.7 percent of the company, according to Thursday’s filing. Some of Reddit’s power users in the US could join the ranks of owners, as it plans to sell them shares ahead of the market debut, similar to how housing rentals service Airbnb set aside shares for some of its dedicated hosts during its IPO in 2020.
Sudden Split
Years after the pair sold Reddit, Ohanian helped draw Huffman back to the company, and Huffman took over as CEO in 2015. Huffman was a groomsman at Ohanian’s wedding to tennis champion Serena Williams in 2017.
But as the pandemic and Black Lives Matter protests swelled in 2020, Ohanian’s concerns about violent communities on Reddit, such as r/watchpeopledie, grew. After Huffman declined to ban them, Ohanian quit Reddit’s board that year with just hours of warning and asked that his replacement be someone who is Black. The company granted that request, appointing in his place Michael Seibel, managing director of startup incubator Y Combinator and longtime friend of the cofounders. But inside Reddit, Huffman blamed Ohanian for leaking company discussions about content policies and warned staff who remained friends with Ohanian to be mindful of what they discussed with him, according to several former Reddit employees.
Ohanian told WIRED in a recent interview that he hasn’t thought much about his cofounder since leaving the board. Huffman quickly had to move on himself to focus on courting advertisers and new users. According to the S-1, Reddit generated $804 million in sales last year, up nearly 21 percent from 2022. It narrowed losses by 43 percent to about $91 million.
Over 98 percent of Reddit’s revenue last year came from selling ads displayed among posts and comments across its over 100,000 subreddits on topics such as sports and politics. But Huffman in Thursday’s SEC filing described other revenue opportunities: taking a cut of transactions between users in Reddit’s communities such as r/PhotoshopRequest and licensing the content of users’ posts to investors wanting to study the latest consumer trends or tech companies eager to train AI chatbots with real human conversation. Those other sources of revenue grew at only 8 percent last year, though momentum may be picking up ahead of the IPO. Reddit on Thursday also announced a deal to license data to Google to enable the search giant “to improve its products and services.” In return, according to the announcement, “Google will make it easier for people to find, discover, and engage in content” from Reddit.
Reddit could still scuttle plans to go public, and it hasn’t publicly set a date for its stock market debut. A new listing is often marked by company founders and executives ringing the bell to signal the market's open or close. Whenever it happens, don't expect to see both Reddit's cofounders there.
Updated 2-23-2024, 5:30 pm EST: Huffman blamed Ohanian for leaking internal company discussions, not board deliberations.
