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BuzzFeed Stock Drops Nearly 24%

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

Its shares fell 23.6%, to close at $5.87, and at that price they are now down 31% from their close on Monday, when it debuted as a company. public.

BuzzFeed, which is known for both its catchy listings and traditional journalism, went public by merging with a shell company known as ad hoc 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 far less money from the merger than it had expected after many SPAC investors demanded their money back. BuzzFeed management had hoped the IPO would make it easier for it to acquire other digital media companies. But it will be much more difficult after the failure of its fundraising and if its stock remains depressed.

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

BuzzFeed’s Rough First Week Will Send Chills the boardrooms of other digital media companies that hoped to go public or raise new funds.

The speed and depth of BuzzFeed’s stock decline may be partly due to the small number of stocks available for trading. It may not take a lot of selling to drive the stock price down; conversely, a small purchase amount would send it higher.

BuzzFeed appears to have enough cash to fund its business. It recently raised $150 million through the sale of 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.