Buzzfeed News is shutting down its unprofitable News division.
It will keep open HuffPo which it acquired in 2020
BuzzFeed News is shutting down.
In an email to staff shared with NBC News, BuzzFeed Inc. CEO and co-founder Jonah Peretti said the move was part of a 15% workforce reduction across a number of teams.
“While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,” he wrote. . . .
Moving forward, BuzzFeed will have a lone news brand, HuffPost, which BuzzFeed acquired in 2020 and which Peretti said “is profitable, with a loyal direct front page audience.”
Company stock, which had been selling for as much as $5.62 in the past 12 months, is currently trading for 56¢. The company is losing $1.07 per share per year.
The company has $335 million in debt it’s been publicly-traded for only two years so presumably all fo that comes from the “free money era.”
It also lists $530 million in assets, which sounds pretty good, until you mine the numbers and find out most of that is “intangible assets.” The company’s tangible net assets total negative $41 million.
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I am only a little familiar with the company. My impressions are that, aside from owning HuffPo it is no more liberal or woke than the average media company. It distinguishes itself by trying to appear youthful" and “memey.”
It is not as dumb as pet rock NFTs or real estate in the metaverse or crypto currency, but I think it is safe to say that it was born only because of the “era of free money” and, not surprisingly, is dying now that money is not free.
Zombie company living on low-interest $ the last few years. We are going to be seeing a lot of these parasites that produce nothing fall by the wayside.
Yup
As of Dec 2022 (free money ended roughly April 2022) a near-record 45% of Russell 2000 companies were operating at zero-profit or less. Not all of them are completely dumb or mismanaged (like Uber and Beyond Meat etc.)
Sadly
one effect of free money is that a bunch of zombie companies are born, crowding the field and making life difficult for good strong companies.
Yes and that is (one of the reasons) I am so bearish on the stock market.
Corporate debt itself is not horrible, but right now a lot of companies are not making ANY profit. They cannot pay their debts at all. If the economy stays the same or declines they will downsize or die.
The Apple’s and Microsoft’s of the world are okay but aren’t the balance sheets of many of the mid-sized and more specifically the smaller companies pretty much a mess?
This is a good article which summarizes nicely why Buzzfeed News Division failed
Buzzfeed did some excellent journalism but the reality is in today’s internet giving away your content for free needs far more support than any business will get.
The article reads a little like “Unfair! Blame the guy.”
Of its five reasons its first three blame big other guys
1 Tech giants reaped value from BuzzFeed News’s content
2 Big platforms did not provide financial support
3 New platforms like Instagram and TikTok hurt BuzzFeed News’s prospects
and its last two blame "stuff that happened to it
4 The SPAC IPO fiasco affected the company’s financials
5 Several media companies are struggling due to changing landscape
Fact is BuzzFeed never ran a profit and was able to go public (became a stock) only because an extended policy of zero interest rates meant that all the decent, profitable companies had already gone public and Wall St was scraping the bottom of the barrel to take anything that kinda makes sense and make it into an investible stock. It’s entirely possible that software engineers with a goo idea might such at manging a $500m company.
Or maybe it was a good idea but just not good enough to succeed in the environment.
that company relies on inline ad revenues (just like the dot,com era crashers), and
they are forming in a era when established competitors and new start-up competitors all have plenty of cheap money to compete with them.
