Chris Cuomo says he will end his radio show two days after CNN’s dismissal.
BuzzFeed was once at the forefront of digital media companies that would overtake traditional publishers and change the way people watch and read news and entertainment – an ambition it struggled to achieve.
The company was hoping to regain some of its momentum this year by listing its shares on the stock exchange. But that debut on Monday was a disappointment, underscoring how difficult it will be for digital media companies to become the giants they wanted to be.
Not only did BuzzFeed’s shares, which trade under the symbol BZFD, close 11% at $ 8.56 on the first day of trading after a brief early rise, the company also raised significantly less money than expected thanks to the deal that put him on the stock market.
BuzzFeed’s management had given high priority to listing the company’s shares on the stock exchange. Executives argued that having the shares publicly traded would allow the company to take over other digital publishing businesses, thereby attracting more readers and ad revenue.
BuzzFeed’s business has grown by developing eye-catching ways – including lists and quizzes – to engage readers, and its news division won its first Pulitzer Prize this year. But she and other digital media companies, funded by venture capitalists over the past decade, have faced an increasingly difficult advertising climate. At the same time, many of their early investors have grown impatient and are looking to sell some or all of their holdings.
The IPO could help solve some of these difficulties, but it can also increase the pressure on companies if they do not meet the expectations of investors and analysts. And a stagnant or falling stock price could make a buying spree nearly impossible.
To go public, BuzzFeed merged with a special purpose acquisition company, or SPAC, a deal that could have raised more than $ 250 million to help fund acquisitions. But last week, the company revealed that it only made $ 16 million after a large number of shareholders in the acquisition company, 890 5th Avenue Partners, refused to participate in the merger and chose to recover the money they had invested. The company was able to borrow $ 150 million by selling convertible bonds – corporate bonds that can be exchanged for stocks in the future at a certain price.
As of Monday’s closing share price, BuzzFeed is worth just over $ 1.13 billion based on how many shares the company estimates it has outstanding. That’s about 50 percent more than Gannett, the publishing house that owns USA Today.
Many of the company’s shares are not available for trading because their owners are not allowed to sell them or have no intention of selling them. This could cause its share price to be volatile and fluctuate sharply up or down. Early Monday, BuzzFeed shares rose about 50% before falling sharply.
Executives at other digital media companies were closely monitoring BuzzFeed’s entry into the public market and will surely track its results now that it has to reveal its financial results to the world on a quarterly basis.
Vice Media, the publisher of youth culture and news, was in talks this year with an acquisition company, 7GC, to merge and go public, the New York Times reported. Vice had been forced to pay private equity giant TPG, one of its investors. But Vice suspended his IPO plans, announcing in September that he had raised $ 135 million in investor funding, which would be used for “his growth initiatives” and for mergers and acquisitions.
A person familiar with the plans said Vice decided not to make a deal with an acquisition company because many investors were much more skeptical of such deals after regulators and financial experts raised concerns. questions about the credibility of companies that had gone public with the help of a PSPC.
Vox Media, which bought New York magazine and its websites in 2019, is still considering a possible merger of PSPC, The Information reported last month. The company recently bought Punch, a cocktails website.
Bustle Digital Group plans to go public next year, Bryan Goldberg, its chief executive, said in an interview on Monday. The company, which publishes the women’s website Bustle, has taken over other outlets in recent years, including Gawker and Mic.
“The mere fact that BuzzFeed is in the public markets is a big step for the industry,” Goldberg said, speaking before the share price fell. “But the first hour of trading wasn’t just a positive surprise, it was a ‘spit your coffee’ surprise.
“BuzzFeed and all the other digital media companies have spent the last three years really improving our business and really figuring out how to create value for customers and for users,” added Mr. Goldberg. “And I think a lot of us think that with renewed optimism and hopefully better access to capital, we can continue to grow without too much opposition.”
Group Nine Media, which publishes PopSugar and Thrillist, formed its own SPAC last December, saying in a securities depository at the time that it intended to merge with similar companies.
BuzzFeed has already made some notable acquisitions. As part of its deal with 890 5th Avenue, it announced the takeover of sports and entertainment publisher Complex, in addition to its takeover of HuffPost last year.
“I don’t care how we go public,” Jonah Peretti, CEO of BuzzFeed, said in an interview Friday. “Once we saw that we had our way through this market – even though the market was cold – it was just a way to come to an end to go public.”
And some analysts have said BuzzFeed’s acquisition strategy is attractive. By consolidating several publications, BuzzFeed would be able to offer advertisers access to larger audiences.
“There is definitely something to the idea of consolidation,” said Brian Wieser, global president of business intelligence at GroupM, the media investment arm of advertising firm WPP. “This is the reason why, in the past, Time Inc. was a house of brands. “
In the first half of 2021, BuzzFeed posted revenue of $ 162 million, up from $ 123 million a year earlier. During the same period, it suffered a loss of $ 12 million, a slight improvement from the $ 19 million lost a year earlier.
For former and current BuzzFeed employees who have shares in the company, the business beginnings offer some promise of financial gain, although many weren’t sure exactly how much they would benefit from it, a current staff member said. (Ben Smith, former editor of BuzzFeed News and now Times media columnist, also owns stock options in BuzzFeed.)
And not all employees are happy. On Thursday, the day shareholders voted to go public, all 61 members of the BuzzFeed News union walked out of work to protest stalled contract negotiations.
On Monday, champagne was distributed in the BuzzFeed office, which has been largely empty for almost two years due to the pandemic. Employees saw a video that showcased different parts of the business as ingredients for a cake. It was filmed in the style of BuzzFeed’s popular Tasty food videos, with Tasty represented as flour, BuzzFeed as sugar, BuzzFeed News as eggs, HuffPost as butter, and Complex as hot sauce.