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Shareholders of digital media pioneer BuzzFeed, known for its listings, quizzes, and news segment that won its first Pulitzer Prize this year, voted Thursday to take the company public.
The deal that will bring BuzzFeed to the stock market raised less money than initially expected, which could cut the company’s spending and curb its ambitions for years to come.
Led by BuzzFeed co-founder and CEO Jonah Peretti, the longstanding plan will merge it with 890 5th Avenue Partners, a special-purpose acquisition firm. So-called SPACs raise money through an initial public offering and use that money to buy a private company.
The deal is expected to be finalized by Friday, 890 5th Avenue Partners said in a press release. BuzzFeed, stock market first On Monday, under the ticker symbol BZFD. Part of the deal includes completing BuzzFeed’s $300 million acquisition of Complex Networks, a sports and entertainment publisher.
Because investors who buy a SPAC don’t know which company they plan to buy, they have the opportunity to repurchase those shares at the IPO price — in this case, $10 — before reaching any deal. Many did. BuzzFeed could have raised more than $250 million from investors in SPAC, but it eventually only raised $16 million, according to a report from BuzzFeed and 890. But BuzzFeed will have $150 million from the sale of debt securities. Other SPAC deals in recent weeks have suffered from shareholders asking for their money back.
As shareholders voted, a move that could mean millions of dollars for its initial investors and some current and former staff, not everyone in the company was cheering: Union employees held a day-long study on its news division, BuzzFeed News. suspension in order to expedite contract negotiations. The union said all 61 workers belonging to the BuzzFeed News Syndicate, made up of reporters, editors and designers, took part.
In a statement, the union accused the company of refusing to make concessions in contract negotiations. The main sticking point is payment. The union said BuzzFeed is offering a guaranteed 1 percent annual wage increase and a minimum salary of $50,000.
“We deserve a strong contract that protects us and ensures a fair and equitable workplace for everyone in our unit,” senior technology reporter Katie Notopoulos said in a statement.
A BuzzFeed spokesperson said the company will “return to the negotiating table next Tuesday, where we hope the union will offer a response on these issues.”
union, which created In February 2019, she is represented by the NewsGuild, which also represents workers at The New York Times and other media outlets. The union and company have yet to agree on an initial contract.
BuzzFeed was launched in 2006 from a small office in New York’s Chinatown as an experimental project for Mr. Peretti in viral media. He dedicated himself full-time to BuzzFeed in 2011 after AOL bought HuffPost for $315 million and turned it into an independent media company with the help of $35 million from investors.
It was soon hailed as the future of news media. However, it has failed to meet its revenue targets in recent years, and some investors have pressed for sales. It gained scale last year when BuzzFeed bought HuffPost from its last owner, Verizon, in an equity deal.
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