The owners of Condé Nast are set to reap a $1.4 billion windfall from Reddit

The Internet has not been kind to Condé Nast, the publisher of celebrity magazines like Vogue and Vanity Fair, whose fortunes and influence have waned in the digital age.

But as the web takes, it also occasionally gives.

The Newhouse family, the media dynasty that controls Condé Nast through its holding company Advance Publications, will reap a windfall of about $1.4 billion on Thursday when social site Reddit lists on the New York Stock Exchange. Condé Nast acquired Reddit in 2006 for just $10 million.

With its anarchic culture of amateur commentators, Reddit is a far cry from the carefully curated guides to high life in the Condé Nast stable. But the public offering will reward an early and prescient bet on the company by the Newhouses, who own about a third of the outstanding shares.

Advance, which also has major interests in Charter Communications and Warner Bros., among others. Discovery, is privately owned and its finances are closely guarded. It is uncertain whether Condé Nast itself would benefit from the value of Reddit stock; representatives declined to comment. Both Charter and Warner Bros. have seen significant declines in their stock price over the past year.

Advance is subject to a six-month lock-up 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 resolved a dispute with its union. In January, the company moved Pitchfork, the hipster music magazine, under the auspices of GQ. Its CEO, Roger Lynch, said this month that 2023 revenue was unchanged from the previous year, partly blaming a tough advertising market.

Advance spawned Reddit in 2011, and one of the website’s founders, Alexis Ohanian, later credited the Newhouses with giving Reddit “a ridiculous level of autonomy.”

In a sense, the Newhouses’ future windfall is consistent with a business strategy of the family’s patriarch, Samuel I. Newhouse, a real-life Horatio Alger who rose from poverty to create one of the country’s wealthiest media dynasties. Newhouse, who founded Advance in 1922, was an early specialist in distressed assets, buying up troubled newspapers at low prices and turning them into profit makers.

Condé Nast itself was a fading grande dame when Newhouse bought the publisher in 1959 and saw opportunity in fashion magazines.

Robert A. Sauerberg Jr., a former CEO of Condé Nast who still sits on Reddit’s board of directors, also owns nearly 50,000 shares in the tech company, according to public filings. His stake would potentially be worth $1.6 million below the $34 per share price target.

Katie Robertson reporting contributed.