The internet has not been kind to Condé Nast, the publisher of starry magazines, like Vogue and Vanity Fair, whose fortunes and influence have waned in the digital age.
But while the web taketh, it occasionally giveth, too.
The Newhouse family, the media dynasty that controls Condé Nast through its holding company, Advance Publications, is set to reap a windfall of roughly $1.4 billion on Thursday when the social site Reddit is listed on the New York Stock Exchange. Condé Nast acquired Reddit for a mere $10 million in 2006.
With its anarchic culture of amateur commenters, Reddit is a far cry from the meticulously curated guides to haute living in the Condé Nast stable. But its public offering will reward an early and prescient bet on the company by the Newhouses, who own roughly one-third of the outstanding shares.
Advance, which also has major stakes in Charter Communications and Warner Bros. Discovery, among other investments, is privately held, and its finances are closely guarded. It is uncertain whether Condé Nast itself would benefit from the value of the Reddit stock; representatives declined to comment. Both Charter and Warner Bros. have seen significant dips in their stock price over the past year.
Advance is subject to a six-month lockup period during which it cannot sell its more than 42 million Reddit shares.
Condé Nast, like many other media organizations, recently announced a round of layoffs, and more cuts are expected after the company resolves a dispute with its union. In January, the company moved Pitchfork, the hipster music magazine, under the auspices of GQ. The chief executive, Roger Lynch, said this month that revenue in 2023 was unchanged from the year before, blaming in part a tough advertising market.
Advance spun out Reddit in 2011, and one of the website’s founders, Alexis Ohanian, later credited the Newhouses for providing Reddit with “a ludicrous level of autonomy.”
In a sense, the Newhouses’ prospective windfall is in keeping with a business strategy set by the family’s patriarch, Samuel I. Newhouse, a real-life Horatio Alger who rose from poverty to create one of the country’s richest media dynasties. Newhouse, who founded Advance in 1922, was an early specialist in distressed assets, buying up struggling newspapers at cut-rate prices and turning them into profit makers.
Condé Nast itself was a fading grande dame when Newhouse bought the publisher in 1959, sensing opportunity in fashion magazines.
Robert A. Sauerberg Jr., a former Condé Nast chief executive who remains on the board of Reddit, also owns nearly 50,000 shares in the tech company, according to public filings. His stake would potentially be worth $1.6 million under the price target of $34 a share.
Katie Robertson contributed reporting.
Source Agencies
