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 “BFZD,” 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.
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.
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