After having jumped 53% during the session, the online media closed on a heavy drop by 11%, Monday, for his first day of quotation in Wall Street. At issue: the recent spac disappointment, but also performance below expectations.
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The day was chaotic: after winning up to 53% at the beginning of the session and then fell by 17%, the action of the online media buzzfeed ended at $ 8.56, on a heavy drop of 11%, Monday, December 6, for the first day of its quotation in New York. BuzzFeed is thus valued 350 million dollars (310 million euros) after a walk to Wall Street laborious. The media company, which also has the Huffington Post and the Tasty cooking recipe site, announced in June its merger with a SPAC, a company nicknamed “blank check”.
SPACs are empty shells that enter the stock market, raise capital, at the price of 10 dollars the action, and then leave white card to the managers to redeem the target of their choice, which thus introduces it. Scholarship without having to respect the heavy usual procedures. In return, SPAC investors have the right to be reimbursed for their starting price if they are not satisfied with the choice of the purchased business. That’s what happened with the SPAC 850 5th Avenue, which had lifted $ 287.5 million to make an acquisition. Since the announcement, in June, from its target – BuzzFeed – it is haemorrhage: investors have asked 94% to be reimbursed for their bet.
in fine, buzzfeed, which claims 135 million unique visitors per month, has raised only $ 16 million in capital on the NASDAQ, to which $ 150 million should be added to convertible equity bonds. These securities are remunerated in this case at a rate of up to 8.5% according to the Financial Times, which may weigh on the company’s financial expenses.
“This does not change our strategy,” said Financial Times Jonah Peretti, CEO Founder of the Group, who took advantage of the operation to redeem Complex Networks, a sports site and entertainment, at a price of 300 million. of dollars. “I’m not an expert in SPAC, I just see the SPAC as a way for us,” he added. Mr. Peretti, however, recognized CNBC to enter the SPAC market when it was “very hot” – “even companies that were not very good companies raised a lot of money with very high valuations” – And that the market has become since “glacial”.
By buying anything far too expensive, SPAC collapsed on the stock market in April and investors withdrew. According to the Financial Times, the SPACs rendered an average of half of their capital in the third quarter, compared with 10% at the beginning of the year.
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