BuzzFeed shares drop almost 24%

BuzzFeed’s first week on the stock market turned from bad to worse on Thursday, when its stock lost nearly a quarter of its value.

Her shares fell 23.6%, to close at $ 5.87, and at that price, they’re now down 31% from their closing position on Monday, when she debuted as a public company.

BuzzFeed, which is known for both its catchy lists and traditional journalism, went public by merging with a shell company known as the Special Purpose Acquisition Company, or SPAC, a route to the stock market that was popular earlier this year but has since fallen out of favor with investors.

BuzzFeed raised significantly less money from the merger than it expected after many PSPC investors demanded their reimbursement. BuzzFeed executives had hoped that the IPO would make it easier for it to acquire other digital media companies. But it will be much more difficult after his fundraising has been insufficient and his action remains depressed.

At its current share price, BuzzFeed, which bought out HuffPost last year, has a market value of $ 775 million.

BuzzFeed’s tough first week will send shivers down the boards of other digital media companies hoping to go public or raise new funds.

The speed and depth of the fall in BuzzFeed stocks may be in part due to the small number of stocks available for trading. It may not take a lot of sales to bring the stock price down; conversely, a small amount of purchases would send it higher.

BuzzFeed appears to have enough cash to fund its business. She recently raised $ 150 million by selling debt securities. In the nine months to the end of September, it lost $ 16 million, a slight improvement from a loss of $ 21 million in the same period of 2020.

About Virginia Ahn

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