What Happened With BuzzFeed's SPAC Merger?

BuzzFeed finally made its debut on Wall Street yesterday but suffered a loss on its first day of trading, but is it a sound investment?
Dec. 7, 2021
Unlock Free Stock Insights + 50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

Digital media company BuzzFeed (NASDAQ: BZFD) made its long-awaited debut on the stock market yesterday following a merger with a special-purpose acquisition company (SPAC). After a flurry of initial trading that saw the firm's value jump over 50%, it ended up closing down 11% to end a tumultuous first day as a publicly-traded company.

What is BuzzFeed?

BuzzFeed is a digital media company that focuses on news and entertainment in particular. Starting out in 2006 with a focus on tracking viral content, the company gained a lot of traction for its pop-culture articles and offbeat online quizzes.

2011 saw the company put a huge focus on conventional long-form journalism. This has paid dividends, with numerous accolades won -- including a coveted Pulitzer Prize. 

What happened after BuzzFeed went public?

SPAC mergers have become an extremely popular way of taking a company public. However, increased scrutiny from the U.S. Securities and Exchange Commission (SEC) has certainly weighed on the SPAC market, especially with investigations ongoing into notable SPAC mergers such as Lucid Motors' recent deal.

In BuzzFeed's case, it suffered a massive withdrawal of funds from the blank-check company it was merging with only days before it planned to go public. Roughly 94% of the $287.5 million that had been raised got pulled from the company, leaving BuzzFeed with only $16 million as a result of the merger. This largely defeated the main point of a SPAC, which is gaining the capital raised by the shell company once you merge with it.

Investors, seeing this large-scale sell-off before the company's debut as a highly negative sign, stayed clear and the stock dropped as a result.

So should I buy BuzzFeed Stock?

Much is left to be seen about BuzzFeed's true value on the stock market. Some major acquisitions, including HuffPost last year and the planned purchase of Complex Networks in the new year, certainly look set to intrigue investors. Projected sales increases of 25% annually through 2024 are also lofty targets that, if hit, would certainly warrant a closer look for potential shareholders.

However, until these projections become a reality it might be best to steer clear for now until BuzzFeed truly finds its feet on Wall Street after having the rug pulled from under it earlier in the week.

Are you looking for that right company to kickstart your portfolio? Look no further than MyWallSt, where our shortlist of market-beating stocks will take you to the next level. Don't believe us? Why not get free access today?


Unlock Free Stock Insights +50% Off Discount Code!
Join thousands of savvy investors and get:
  • Weekly Stock Picks: Handpicked from 60,000 global options.
  • Ten Must-Have Stocks: Essential picks to hold until 2034.
  • Exclusive Stock Library: In-depth analysis of 60 top stocks.
  • Proven Success: 10-year track record of outperforming the market.
Sign up to our mailing list now and enjoy a 50% discount on premium services!
By submitting your email address, you consent to us keeping you informed about updates to our website and about other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Policy and Terms of Use.

The Home of Successful Investing.

© 2024 MyWallSt Ltd. All rights reserved.

Services

Content

Social

Company

Support

Resources

This website is operated by MyWallSt Ltd (“MyWallSt”). MyWallSt is a publisher and a technology platform, not a registered broker-dealer or registered investment adviser, and does not provide investment advice. All information provided by MyWallSt Limited is of a general nature for information and education purposes, and you should not construe any such information as investment advice. MyWallSt Limited does not take your specific needs, investment objectives or financial situation into consideration, and any investments mentioned may not be suitable for you. You should always carry out your own independent verification of facts and data before making any investment decisions, as we cannot guarantee the accuracy or completeness of any information we publish and any opinions that we publish may be wrong and may change at any time without notice. If you are unsure of any investment decision you should seek a professional financial advisor. MyWallSt Limited is not a registered investment adviser and we do not provide regulated investment advice or recommendations. MyWallSt Limited is not regulated by the Central Bank of Ireland. MyWallSt Limited may provide hyperlinks to web sites operated by third parties. Your use of third party web sites and content, including without limitation, your use of any information, data, advertising, products, or other materials on or available through such web sites, is at your own risk and is subject to the third parties' terms of use.