BuzzFeed is set to go publicly traded Monday, after shareholders of a SPAC called 890 Fifth Avenue Partners voted to approve a previously announced merger.
yes but: Much of the money raised by SPAC was scuttled in January, a sign that investors aren’t too optimistic about BuzzFeed’s future prospects.
- SPAC investors, many of whom make purchases before the acquisition target is disclosed, are allowed to redeem before the deal closes.
description: buzzfeed Said in an SEC filing After the vote, “the transaction is expected to raise at least $166.2 million,” with approximately $150 million coming from convertible debt financing and $16.2 million from investor cash.
- Investor cash of $16.2 million is down 94% from the $287.5 million SPAC raised in its IPO in January.
Be smart: While it has become more common for SPAC investors to redeem before a SPAC merger over the past few months, the BuzzFeed deal pulled investors out at a higher-than-average rate.
- wall street journal famous That, since July, the average SPAC has “lost about 60% of its funds before the completion of its deal, up from about 25% in the first seven months of the year.”
big picture: Existing BuzzFeed investors will finally be able to cash out once the company begins publicly trading on Nasdaq next week. Many have waited more than a decade.
- BuzzFeed wanted to go public before the pandemic, but lost momentum due to headwinds affecting the entire digital media landscape.
- At least one of BuzzFeed’s investors, NBCUniversal, has Allegedly expressed concern that BuzzFeed’s target valuation for the SPAC IPO is too low.
- BuzzFeed’s pre-announced acquisition of Complex Networks for $300 million in cash and stock is expected to close Friday, which is also when the SPAC merger goes into effect.
Between the lines: Members of the Buzzfeed news union held a digital walkout on Thursday ahead of the shareholder vote. walkout cause stress between union members and management, but the SPAC merger did not affect the vote.
- A spokesperson for BuzzFeed told Nerdshala on Thursday that there is ,A negotiating session is planned for next Tuesday where we expect the union to respond to these issues.”
What will happen next: The digital media firm considering going public will be tracking BuzzFeed’s stock market debut to see how investors will react.