At Nasdaq Monday, BuzzFeed CEO Jonah Peretti — flanked by Instagram celebrity “Dude with Sign” and people holding oversized yellow “OMG” and “win” signs — rang the opening bell for BuzzFeed’s debut as a public company. Simultaneously at BuzzFeed’s headquarters in New York, an acrobatic cat performed.
It was both a celebration of BuzzFeed, the digital media brand known for its lists, quizzes and journalism, and a scene epitomizing it, or at least the way it wants to be seen.
Shares in BuzzFeed, which is trading under the ticker “BZFD,” opened Monday at $10.99 per share. It later jumped by more than 40% but then fell back down. In January, 850 Fifth Avenue Partners — the special purpose acquisition company that merged with BuzzFeed to take it public — priced its initial public offering at $10 per share. On Friday, it had closed at $9.62 per share.
BuzzFeed’s deal to go public via SPAC kicked off with the official acquisition of Complex, a media company with popular franchises such as “Hot Ones.” Last year, BuzzFeed announced it was acquiring HuffPost, and Peretti has made it clear he wants to fold more media brands into what is now known as BuzzFeed, Inc.
“The big thing digital media needs for consolidation is a strong public company and we wanted to be the first,” Peretti recently told Bloomberg.
Cooling of the SPAC market
Though the flying cat and other fun may have given off the image of a trading debut that was all celebration, behind the scenes there is a lot of uncertainty. After some investors pulled out, BuzzFeed raised just $16 million in going public; the June announcement of the move said the SPAC held about $288 million in cash. BuzzFeed also raised about $150 million in debt financing.
“It doesn’t change our strategy,” Peretti recently told the FT of the lower than expected raise. “I’m not an expert on SPACs. I just see SPACs as a means to an end for us.”
Peretti told CNBC on Monday they “anticipated” the withdrawals.
“We entered a SPAC market that was very hot, where even companies that were not very good companies were raising at very high valuations, raising a lot of cash,” Peretti said on CNBC. “We have just this year — not three or four years out — over half a billion dollars in revenue. We’re a real business that could have taken a traditional IPO path.”
BuzzFeed’s stock performance will serve as a bellwether for the rest of the media industry. Other media companies have considered going public via SPAC. But Vice, for example, said it recently paused the effort as the market for SPACs has cooled. If BuzzFeed can prove it’s a viable path forward, its peers in digital media could follow.
For BuzzFeed staffers, Monday’s Nasdaq listing turned into a reunion of sorts. Some employees returned to their offices for the first time since 2020. BuzzFeed’s offices in New York, Los Angeles and London each hosted celebrations. Staffers from Complex were invited to join, too.
The mood among editorial employees in the New York office was “jovial,” said one BuzzFeed editorial staffer in attendance. “It’s a mix of ‘yay IPO’ and great seeing people for the first time since the pandemic.”
Another editorial staffer said they found the vibe to be “festive” but mostly involved people catching up with their colleagues or otherwise working. Peretti held an all-hands meeting in the afternoon where he thanked employees but did not take questions. No one in the office seemed particularly concerned with the performance of the stock, according to the two staffers, both of whom requested anonymity because they are not authorized to speak on the record.
But some former BuzzFeed employees who had exercised their stock options expressed confusion and frustration — in private channels and publicly on Twitter — about how to sell their shares.
Other tensions between staff and management preempted and permeated the day. On Thursday, timed with the shareholder vote for the deal, the union of BuzzFeed News staged a walkout to call attention to ongoing issues regarding bargaining for their contract.
“We’ve been bargaining our contract for almost 2 years, but BuzzFeed won’t budge on critical issues like wages — all while preparing to go public and make executives even richer,” the union tweeted.
On Monday, Twitter once again was home to criticism over the contract negotiations. People called for a fair contract and higher wages in the replies to a Twitter poll from BuzzFeed’s account that asked followers if they were team Jonah [Peretti] or team acrobatic cat. About three hours into voting, the cat was winning by 9 to 1.