BuzzFeed’s financial woes are deepening as it nears a deal to sell most of its Complex Networks business to Ntwrk, a live video shopping and e-commerce startup, for just above $100 million. This amount is significantly less than the hoped-for close to $150 million, leaving BuzzFeed far short of the sum needed to repay its convertible notes due in December 2024.
With only $42 million in cash as of the end of September and an additional $50 million owed to banks on a credit line, BuzzFeed is barely breaking even after a 28% drop in revenue in the first nine months of the year, primarily from declines in advertising and content revenues. This situation has forced BuzzFeed to contemplate selling other assets, including possibly its most valuable business, Tasty, which could fetch around $100 million.
The company’s market capitalization has tumbled to $36 million with a stock price at 25 cents, prompting Nasdaq to consider delisting BuzzFeed. The falling stock price also led CEO Jonah Peretti to relinquish about a fifth of his personal stake to NBCUniversal, an early investor, as the stock failed to reach the $12.50 price point agreed upon during its public debut. High-level executive resignations, including President Marcela Martin and Chief Financial Officer Felicia DellaFortuna, add to the company’s troubles.
BuzzFeed’s sale of Complex, acquired for nearly $300 million in late 2021, represents a drastic decline in media asset valuations over the past two years. The deal with Ntwrk will see assets like Complex.com and the ComplexCon festival sold off, while retaining parts like First We Feast and “Hot Ones,” which hold considerable value.
As BuzzFeed reorients its focus on standalone operations for its remaining portfolio, including HuffPost and First We Feast, the media landscape continues to reflect the harsh realities facing digital media enterprises in a rapidly evolving market. The tech industry’s contrasting success, with companies like Apple and Nvidia experiencing substantial growth, further underscores the volatility and challenges within the digital media sector.