Yesterday morning, amid jiggling yellow “omg” and “win” cut-outs and a shower of confetti, BuzzFeed made its debut on the stock exchange. Jonah Peretti, the company’s CEO, was present at the Nasdaq to ring its opening bell; he stood behind a podium marked with the Nasdaq logo and BuzzFeed’s new trading ticker—BZFD—among a crowd of a few dozen people that included Danielle C. Belton, the editor of HuffPost, which BuzzFeed recently acquired, and Dude With Sign, an Instagram celebrity who held up a sign (you were warned) that read “Glad We Didn’t Sell To Waystar,” a nod to the fictional media conglomerate in the hit drama Succession. A black and blue dress (or was it white and gold?) stood among the group on a mannequin, in a nod to BuzzFeed-virality past; over at the company’s New York offices, a performing cat from America’s Got Talent jumped onto a cushion to mark the opening bell. BuzzFeed also published a quiz for prospective investors. (“Do NOT Rely On This Quiz For Investment Advice,” the headline advised.) It was all, as CNN’s Kerry Flynn put it, “both a celebration of BuzzFeed” and “a scene epitomizing it, or at least the way it wants to be seen.”
If the (literal) bells and whistles seemed like a lot, they at least reflected the historic nature of the occasion: BuzzFeed is the first major digital-media company ever to go public. The road to this moment formally began in June, when BuzzFeed announced its intention to merge with 890 Fifth Avenue Partners, a special purpose acquisition company, or SPAC. (A red-hot financial trend in the first months of the year, SPACs, also known as “blank check” firms, are public entities that basically exist to raise investment then use it to buy a private company that then also becomes public, in a process that’s meant to be quicker and easier than a normal IPO. Don’t worry, me neither.) BuzzFeed also said that it would acquire Complex Networks, a media and entertainment company, with Peretti making it clear that the leeway to make further acquisitions was a key part of the rationale behind the SPAC maneuver in a media industry where scale is increasingly valuable, especially given the digital-advertising dominance of Facebook and Google. At the time, other digital-media companies—notably Bustle Digital Group, Vox Media, Group Nine, and Vice Media—had also been contemplating the SPAC route; in the end, BuzzFeed was the first out of the gate with a firm proposal. The company said that it would be valued at one and a half billion dollars, and that it would raise more than four hundred million dollars as part of the SPAC process, a third of it through debt financing.
Even before BuzzFeed’s announcement, however, the SPAC market had started to cool, with the Securities and Exchange Commission tightening the accounting rules they must abide by. Digital-media companies’ interest seemed to cool with it: Bustle has said repeatedly that it still plans to go public via a SPAC soon, and Vox is said to still be considering it as one of a range of options, but Group Nine—which already formed its own SPAC—is reportedly still looking for merger partners before it takes the leap, and Vice put its SPAC plans on ice, moving instead to secure a cash injection from existing investors (a week after laying off seventeen staffers). These companies and others are now watching BuzzFeed’s public performance for clues as to their own potential. So far, it’s been a bumpy ride, to say the least. In the end, BuzzFeed raised just sixteen million of the nearly three hundred million (non-debt-financed dollars) invested in the SPAC—a shortfall of ninety-four percent—with many investors in the SPAC, who didn’t know up front that it would merge with BuzzFeed, exercising their right to ask for their money back before the deal was finalized last week. (Since July, the average SPAC has lost around sixty percent of its cash pre-completion, a much higher percentage than in the first half of the year.)
BuzzFeed’s debut on the stock exchange yesterday was also ultimately disappointing—the company’s share price initially spiked, at one point by around fifty percent, but it then declined sharply and finished down eleven percent from the start of the day. (At yesterday’s closing price, the company would be worth around $1.13 billion.) Numerous observers were uncharitable in their assessment of the stock’s performance: Bloomberg called it “a sign investors are wary” of BuzzFeed; CNBC’s Alex Sherman tweeted that “BuzzFeed‘s first couple hours of trading is emblematic of the digital media industry’s last ten years, or even last year. Things were looking up. Now they’re not.” The New York Times reported that BuzzFeed’s share price could continue to be volatile since a lot of the company’s shares aren’t yet in play, with some shareholders facing restrictions on early trades; meanwhile, some former BuzzFeed employees who wanted—and (theoretically) were permitted—to trade found that they can’t yet, due to bureaucratic obstacles. A company spokesperson told Insider that it’s working to quickly resolve such delays, but some ex-staffers publicly accused BuzzFeed management of prioritizing wealthier investors. (Full disclosure: I interned at BuzzFeed in 2017 and am precluded from writing media columns about the company until I divest my stock options. Just kidding, I don’t own any.)
Peretti, for his part, has been bullish, insisting that the SPAC process was purely a means to the end of going public, regardless of the underlying state of that market, and that BuzzFeed will now be in a strong position to pursue acquisitions and grow in a way that benefits the company’s current employees. Ultimately, only time will tell how BuzzFeed fares as a public entity. Whatever its growth looks like, however, the company’s treatment of its staff will remain a live issue. “Consolidation” often precedes cuts, not least at acquired companies; earlier this year, BuzzFeed laid off dozens at staffers at HuffPost just weeks after acquiring the site, and shuttered its Canadian edition. And management have yet to agree on a new contract with BuzzFeed’s unionized staffers, all sixty-one of whom walked off the job on Thursday last week—the same day the company’s shareholders approved the SPAC deal—to draw attention to their dissatisfaction with bosses’ current proposals around pay, staffers’ outside creative rights, and traffic and revenue goals. (Some other provisions have been tentatively agreed upon.) “We’ve been bargaining our contract for almost 2 years,” the union wrote, “but BuzzFeed won’t budge on critical issues like wages—all while preparing to go public and make executives even richer.”
“There’s a bargaining session planned for tomorrow where we look forward to making more progress with the union,” a BuzzFeed spokesperson told Yahoo Finance yesterday. “Today, the company is celebrating an incredible milestone: becoming the first publicly traded digital media company, with Complex Networks in our ranks, and equity for more deals ahead.” Those celebrations included bringing staffers into BuzzFeed’s offices in New York, Los Angeles, and London, many of them for the first time since the pandemic; staffers told CNN’s Flynn that the mood in New York was upbeat, but that “no one in the office seemed particularly concerned with the performance of the stock.” Online, meanwhile, as Flynn also noted, “people called for a fair contract and higher wages in the replies to a Twitter poll from BuzzFeed’s account that asked followers if they were team Jonah or team acrobatic cat,” atop a split-screen image of the bell-ringing moment. As of this morning, the cat had ninety percent of the vote.
Below, more on BuzzFeed, the media business, and SPACs:
- BuzzFeed: Bloomberg’s Gerry Smith reports that BuzzFeed is making personnel changes to manage its transition to life as a publicly-traded company, with Michael Del Nin, a former executive at Time Warner and a major European broadcasting company, in talks to become president. “I’m an entrepreneur,” Peretti told Smith. “I don’t have public market experience so we’re adding that to the team as part of this transaction.” Peretti told Smith that “the big thing digital media needs for consolidation is a strong public company and we wanted to be the first.” (BuzzFeed is now known as BuzzFeed, Inc.)
- Lee Enterprises: Recently, Lee Enterprises, a local news chain whose titles include the Buffalo News and St. Louis Post-Dispatch, instituted a shareholder-rights plan in a bid to stall a hostile takeover by Alden Global Capital, a cost-slashing hedge fund that is trying to add Lee’s properties to its growing media portfolio. On Friday, Lee rejected an effort by Alden, which already holds around six percent of Lee’s stock, to name three directors to Lee’s board, saying that the proposal breached company bylaws. “Getting seats on Tribune Publishing’s board was a step along the way in Alden’s two-year campaign to acquire that company,” Poynter’s Rick Edmonds notes. “Having its own directors at the table would allow Alden to exert similar influence on Lee’s top management.”
- Condé Nast: Over the weekend, Katie Robertson, of the Times, profiled Condé Nast as the company tries to chart a digital future as a global media brand. “The stakes for getting it right go beyond just the company’s financial survival,” she writes. “As well as the existential angst for all old media titans of whether it is possible to remain relevant, there is a bigger question: Can Condé Nast, under pressure, take real steps to address both a culture that many employees described as a difficult place for people of color to succeed and content that has in the past elevated a Eurocentric standard of beauty?” (Robertson asked Anna Wintour about her personal future plans; Wintour demurred.)
- “Truth Social”: Donald Trump has been looking to get in on the SPAC action (SPAC-tion?), too, via his planned new media company. A SPAC called Digital World Acquisition Corporation is proposing to merge with Trump’s new venture, but yesterday, a regulatory filing by Digital World revealed that the SEC and Financial Industry Regulatory Authority are investigating the planned deal; the Times has more. Also yesterday, we learned that Rep. Devin Nunes, the media-bashing California Congressman, is planning to step down from his seat at the end of the month to become CEO of Trump’s media company—despite being in line to lead the powerful Ways and Means Committee should Republicans take back the House next year. The move signals that Nunes “thinks that the power lies in the pro-Trump media,” CNN’s Oliver Darcy writes. “And Nunes isn’t wrong.”
Other notable stories:
- Yesterday, Fred Hiatt, the editorial page editor at the Washington Post, died. He was sixty-six, and had suffered a cardiac arrest last month. Hiatt took over the editorial page in 2000, after previously working as a foreign correspondent for the Post, and in the two decades since, he “either wrote or edited nearly every unsigned editorial published by the Post—more than 1,000 a year—and edited the opinion columns published on the paper’s op-ed page and website,” the paper reports. During his tenure, Hiatt helped throw the weight of the Post’s editorial board behind the war in Iraq, and later helped lead the campaign for justice for Jamal Khashoggi, the Post columnist killed by the Saudi state in 2018. He was also a three-time finalist for the Pulitzer Prize in editorial writing.
- Last week, Ian Urbina, who runs a journalism nonprofit that reports on lawlessness at sea, appeared on CJR’s podcast, The Kicker, to discuss, among other things, how he partners with musicians to bring his stories to a wider audience. Around the same time, Benn Jordan, a musician Urbina approached for a project linked to Urbina’s book, posted a video to YouTube claiming that Urbina is running a “scam” in which he takes half of artists’ royalties in exchange for minimal creative input and promotion; Jordan and other artists also spoke to Input Mag. Urbina told Input that his music project is “being woefully distorted in an incredible way,” but declined to comment further, citing a legal dispute.
- In media-jobs news, the Times is expanding the role of Monica Drake, who has overseen storytelling innovation at the paper and will now help the Times explore “significant new editorial initiatives, especially those that extend beyond the core of our newsroom.” Elsewhere, Neil Irwin, an economics reporter at the Times, is leaving to take over as chief economics correspondent at Axios. Marc Caputo, a politics reporter at Politico, is leaving that site for NBC News. And, after being fired by CNN, Chris Cuomo is also quitting the radio show he hosted on SiriusXM, citing the need to prioritize his family.
- Politico’s Jack Shafer argues that journalists should “pull the plug” on cable news, rather than obsess for days over stories like the Cuomo scandal. “The average audience commanded by Maddow and Cooper and Hannity and all the others slithering down your cable cord is so tiny you can almost get away with calling cable news a niche media,” Shafer writes. “Do we really want to continue to indulge an aged minority’s irrelevant obsession with who said what on cable news? Can’t somebody turn the damn thing off?”
- The Post’s Elahe Izadi profiles States Newsroom, a network of nonprofit outlets that formed two years ago to help fill the void in statehouse reporting brought on by the decline of local news. The organization, Izadi reports, is planning to expand over the next two and a half years to cover forty states, up from twenty-five currently. Its next newsrooms will open in Nebraska, Alaska, Arkansas, South Carolina, and Kentucky.
- For NBCU Academy, Michael H. Cottman spoke with Mark Hayes, the editor of Atlanta’s oldest Black newspaper, the Daily World, about coverage of the recent trial that saw three white men convicted of murdering Ahmaud Arbery, a Black jogger, last year. “The mainstream media didn’t pay enough attention to the fact that these antiquated laws of citizen’s arrests and ‘stand your ground’ are still on the books in many states,” he said.
- Yesterday, two law firms filed a class-action complaint against Facebook in a US court on behalf of Rohingya refugees from Myanmar; the suit holds that Facebook contributed to the genocide of the Rohingya by amplifying and failing to police violent speech. The lawsuit plans to cite Myanmar’s laws should Facebook assert American protections that shield it from liability for users’ posts, but it seems unlikely such a gambit would work.
- Last week, an editorial in the Wall Street Journal made the case that forthcoming elections in Hong Kong are a “sham” and that “boycotts and blank ballots are one of the last ways for Hong Kongers to express their political views.” A senior official in the territory has since accused the paper of “incitement,” and threatened repercussions. CNN has more. (ICYMI, Rachel Cheung wrote for CJR on press freedom in Hong Kong.)
- And in a recent interview with the Journal, the writer Walter Kirn suggested that he was canceled by Harper’s after he wrote a column for the magazine criticizing liberals. Last week, John R. MacArthur, the publisher of Harper’s, hit back, writing in a letter to the Journal that the magazine had decided not to renew Kirn’s contract “because his copy was consistently late and he was complaining about a crushing book deadline.” It “borders on the absurd for Mr. Kirn to play the martyr to left-wing orthodoxy at Harper’s,” MacArthur added, “since the magazine’s reputation for defending liberalism and criticizing political correctness and ‘wokeness’ is now world renowned.”