Condé Nast’s parent made a $2 billion windfall from Reddit’s IPO. Now come the uncomfortable questions
CNN
While Advance cannot sell its shares for six months, laying off staffers as it reaps billionss from Reddit’s IPO could present an optics problem for Condé Nast.
Editor’s Note: A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here. Executives at Advance Publications are likely popping champagne bottles. But as they sip on their celebratory bubbly they are now being confronted with some uncomfortable questions. The S.I. Newhouse-founded media company, which owns the Condé Nast suite of prestigious magazines and local news outlets across the country, netted approximately $2.1 billion on Thursday when Reddit went public on the New York Stock Exchange in a long-awaited blockbuster IPO. The social media company, which priced its offering at $34 a share, rocketed 48% on its first day, closing above $50 in an impressive public debut for the 20-year-old message board platform. It’s quite a return on an investment for Advance, which acquired the “front page of the internet” for a mere $10 million in 2006, before spinning it off in 2011 and allowing others to invest in the digital forum. The windfall, however, comes at a notable time for the company. Like other media giants facing existential headwinds, Advance’s publications have endured a sustained downturn in digital advertising and seen traffic from social media platforms decline, prompting uncomfortable belt-tightening and scaled-back ambitions.
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