Shares of BuzzFeed dropped 11% on the company’s first day of trading as a public entity after merging with a special purpose acquisition company — a disappointing debut for the 15-year-old digital media player, which is unprofitable.
BuzzFeed stock started trading on Nasdaq under the symbol “BZFD” on Monday. Shares opened at $10.95 per share and rose as much as $14.77 (up more than 50%), before slipping into negative territory in late-morning trading. The stock closed at $8.56/share, down 11% for the day, amid a rise in broader market indices. BuzzFeed’s market cap currently stands at $363.85 million.
On Friday, Dec. 3, shareholders of 890 5th Avenue Partners — the special purpose acquisition company (SPAC) that merged with BuzzFeed — voted to approve the deal, setting the stage of BuzzFeed shares and warrants to start trading.
Through the SPAC deal, BuzzFeed netted just $16 million in cash and is also raising $150 million in debt financing. The SPAC had raised $287.5 million through its IPO earlier this year but investors withdrew most of that prior to closing of the BuzzFeed pact.
BuzzFeed touted its launch on Nasdaq as making it “the first publicly traded purely digital media company. The company’s portfolio of brands now includes BuzzFeed, BuzzFeed News, HuffPost, Tasty and Complex Networks, the acquisition of which it closed Monday from previous owners Verizon and Hearst.
In a statement issued earlier Monday, BuzzFeed founder and CEO Jonah Peretti said, “Our next chapter as a public company will help BuzzFeed Inc. become a hub for even more brands and creators, visionary founders and CEOs, high-quality content for the tech platforms, and so much more.”
For the third quarter of 2021, BuzzFeed revenue grew 20% year-over-year, to $90.1 million, which the company reported was driven by double-digit growth in ad and commerce revenues. Net loss for Q3 was $3.6 million, versus a net loss of $2.1 million in the year-earlier period. Adjusted EBITDA improved by $3.2 million to $6.0 million in Q3, primarily driven by continued growth in overall revenue.
BuzzFeed separately reported results for Complex Networks, prior to the close the acquisition. Complex revenue in Q3 grew 9% to $31.2 million while its net loss widened to $3.14 million (versus $2.38 million a year earlier). Adjusted EBITDA also fell, coming in at $333,000 versus $914,000 in Q3 2020.