BuzzFeed missed the high-revenue forecasts it presented to Spac fund investors last year by more than 20%, while the editor-in-chief of the digital media group resigned as it intends to further reduce its newsroom.
When it’s Agreed last June To go public with an empty checks company, BuzzFeed told potential investors that its revenue would skyrocket to $ 521 million in 2021, $ 654 million in 2022 and $ 1.1 billion in 2024, driven by what it called a “scale” Fast and monetized with a deep level of understanding of virality and social. ”
Special Purpose Purchase 890 Fifth Avenue Partners raised $ 288 million prior to its merger with BuzzFeed, but these investors Withdrew 94 percent of their money Before the company went public in December.
Their caution took effect on Tuesday as BuzzFeed reported revenue for 2021 of just $ 398 million in its first annual results as a public company.
It rose from $ 321 million to 2020, but was boosted by two acquisitions completed last year – those of digital media companies HuffPost And complex networks. BuzzFeed declined to say how much additional revenue was generated from these transactions.
Mark Shops, editor-in-chief of BuzzFeed’s news division, told the team Tuesday morning that he was leaving the company, and that BuzzFeed would offer voluntary layoffs to “accelerate the timeline to profitability.”
“This will require BuzzFeed News to shrink in size again,” Chops said in an internal memo, adding that there would be “a change in editorial focus and structure.”
BuzzFeed, known for sharing lists, quizzes and stunt videos, is one of a generation of digital media groups that has experienced an incredible rise and fall in the last decade. Investors slipped on these companies because they did not fit into the hype with financial performance, resulting in a period of Lower valuations and layoffs.
Founder and CEO Jonah Private last year Told FT That he was focused on “financial discipline” when he set out to prove that BuzzFeed can meet its financial forecasts and grow into a sustainable and profitable company. “We are at the beginning of the next phase of valuation appreciation,” he predicted in July.
It is not over. Instead, BuzzFeed’s share price dropped by half from a starting price of $ 10 per share when it was listed on the NASDAQ in December, below $ 5, giving it a value of about $ 660 million.
The group reported a net profit of $ 26 million for 2021, even though that profit was due to a tax benefit. Excluding this, BuzzFeed posted a net loss of $ 528,000 per year.
Private said: “We are confident in our ability to lead the industry forward while working against our long-term growth plans.”
The company has previously fallen short of its forecasts, Income targets are missing In 2015 and 2017.
Private noted the potential of BuzzFeed’s fast-growing trading business, through which it sells products from BuzzFeed brands, from spatulas to sex toys, and earns a commission on recommending other products sold online.
However, this business recorded revenue of $ 17 million in the fourth quarter, down 26% from last year. Advertising was a bright spot, growing 24 percent from a year ago to $ 69 million.
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