June 8, 2022 · less than 3 min read
Buzzfeed loses key shareholders following its SPAC merger in December.
SPACtch you later, Buzzfeed
This week, bad news for Buzzfeed as the company faced a stock drop of 41% on Monday. Wince. It’s a big blow for the brand and the worst percentage drop in Buzzfeed’s trading history. Buuuut it’s not necessarily a surprise knockout that nobody saw coming. For one, it comes a month after a less-than-ideal quarterly report post-IPO. For two, we’re in a market climate that’s increasingly wary of SPACs.
And for three, and most importantly: Some key shareholders have wanted out since the brand went public via a SPAC merger at the end of 2022, but until now, they’ve been held in a lockup agreement, unable to sell their shares.
As of this month, they’re finally free to do as they please and drop that stock. And many have done. A spokesperson for Buzzfeed confirmed to Business Insider that this unfortunate market fluctuation is closely connected to the end of the lockup period.
IPO the way to go?
You could say that things haven’t been all sunshine, lollipops, and rainbows for Buzzfeed post-IPO. Its first earnings call as a public company included the loss of three top editors, workforce cuts, and calls for buyouts in the Buzzfeed News division. Not a great look.
The company’s IPO price was $1.5 billion, but now, less than a year later, Yahoo Finance values the company at only a hollow $300 million. Granted, the 2022 business climate isn’t exactly ideal at the moment, but Buzzfeed’s top execs might just be wondering if there’s a way to un-SPAC – and unlock – the business again.
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