Dropped by investors, BuzzFeed has heckled debut on Wall Street

Before its IPO on Wednesday, the group had to face a massive exodus of investors from the Special Purpose Acquisition Company (SPAC) 890 5th Avenue Partners, with which it has just merged.

It is the IPO that makes the “Buzz” on the side of online media groups. This Monday, the American news site BuzzFeed had a rowdy debut on Wall Street. On the New York Stock Exchange, its shares listed on the Nasdaq, under the symbol “BZFD», Opened up 14% to 10.95 dollars, reaching 14.7 dollars a few minutes later. But BuzzFeed quickly wiped out its gains as a result of these volatile trading. After a low of $ 8.36, the stock traded around noon (New York time) at $ 9.25, valuing BuzzFeed at $ 353 million.

Prior to its IPO, BuzzFeed has had to deal in recent days with a massive exodus of investors from Special Purpose Acquisition Company (SPAC) 890 5th Avenue Partners (named after Marvel’s fictional Avengers mansion), with which it has merged last week to go public.

A PSPC is a publicly traded financial vehicle whose purpose is to raise funds to complete the acquisition of another company. Benefiting from a right of withdrawal, investors at SPAC 890 5th Avenue, which focuses on the technology, media and telecommunications sectors, ultimately decided to withdraw 94% of the amounts raised by the financial vehicle. Thus, BuzzFeed raised much less money than it had hoped for through this operation: $ 16 million, instead of the 250 million raised by the vehicle before the transaction.

“In recent months, we have seen the growing reluctance of investors in this PPCS market. Thus, we had structured the transaction with the idea that a certain number of investors could withdraw. We were ready ”, assured Wednesday Jonah Peretti, founder and general manager of BuzzFeed, on American television CNBC. He notably mentioned “A new convertible bond of 150 million dollars”.

Multiply acquisitions

Despite these adventures, Jonah Peretti assures us that BuzzFeed intends to multiply acquisitions in the media sector in the coming months. As part of the merger with SPAC, BuzzFeed has already acquired the American platform Complex Networks, which brings together several trendy news sites specializing in sports and entertainment.

Founded in 2006 by Jonah Peretti in New York City, BuzzFeed has established itself over the years as a pioneer in free online entertainment and information. It claims 135 million unique visitors per month. And has in its portfolio brands such as the HuffPost site since 2020, and Tasty, a platform dedicated to cooking recipes. In June, BuzzFeed also won its first Pulitzer Prize, for a series of ground-breaking articles that mixed satellite images, 3D architectural models and interviews to expose the vast infrastructure of China used for the detention of hundreds of thousands of Muslims. in its region of Xinjiang.

The IPO takes place in a context where BuzzFeed remains in deficit. In the first nine months of 2021, the online medium, known for its reports, quizzes and viral videos, recorded a loss of $ 15.6 million. Its revenues grew 27% year on year to reach $ 251 million. This growth is linked in part to the return of stable advertising revenues, after the fall in advertiser budgets in 2020 due to the pandemic. BuzzFeed is also benefiting from its successful shift to e-commerce, which now accounts for 14% of its revenue ($ 13.4 million). At the same time, its content revenues ($ 26.5 million) were down 4% year on year.

For 2021, the cumulative revenues of BuzzFeed and Complex Networks are expected to reach $ 521 million. Jonah Peretti, who remains at the head of the merged entity, aims for an average annual growth in turnover of nearly 25% until 2024. With the listing on the Nasdaq, Jonah Peretti will now be accountable to investors on the continued losses of BuzzFeed. “We will no longer be in deficit at the end of 2021”, Jonah Peretti said on CNBC on Wednesday.

We wish to thank the author of this post for this incredible material

Dropped by investors, BuzzFeed has heckled debut on Wall Street