BuzzFeed to go public, after shareholders approve SPAC deal

https://www.axios.com/buzzfeed-to-go-public-after-shareholders-approve-spac-deal-373e2cc8-5efb-459b-a905-bfb2b5224213.html

by nojito • 5 years ago

36 48 5 years ago

axios.com

ArtTimeInvestor• 5 years ago

This announcement made me check out BuzzFeed for the first time.

How do other people get there?

From what I can see, the business model is to have a flood of cheaply written content (My guess would be the average article costs them like $10 to produce?) and then monetize visitors via ads?

dtech• 5 years ago

Visitors mainly come social media sites or other aggregation sites and Google. Your analysis about their model is right. They even are mentioned in the top Urban Dictionary definition of clickbait [1]

[1] https://www.urbandictionary.com/define.php?term=clickbait

fnord77• 5 years ago

the final coffin nail for SPACs?

A4ET8a8uTh0• 5 years ago

If anything, it seems like SPACs are the new IPOs. Everyone wants one.

IAmGraydon• 5 years ago

They aren’t new. They’ve been around since the 1990s. There has definitely been a resurgence though, fueled by retail traders looking for volatile and highly levered equities.

wtf_is_up• 5 years ago

No - just like the previous dozens of times comments like this have been posted.

beervirus2• 5 years ago

Details: BuzzFeed said in an SEC filing following the vote, “the transaction is expected to raise at least $166.2 million," with about $150 million coming from convertible debt financing and $16.2 million from investor cash.
That $16.2 million of investor cash is 94% less than the $287.5 million the SPAC raised in its IPO in January.

Big oof. The SPAC investors hate the deal and mostly pulled their money out of it.

dmurray• 5 years ago

This is pretty standard these days, right? The people who invest in SPACs aren't actually interested in owning the target company medium-term. But someone else is willing to put up the money, so that's fine.

SPACs are not currently primarily a vehicle for raising capital, they're an alternative method for companies to go public. They have different (generally lower) regulatory requirements than an IPO, and different (probably about the same) costs in fees to the company.

beervirus2• 5 years ago

Plenty of SPACs announce a merger and the stock price goes up. You don’t see much/any redemption in a case like that—why redeem a share for $10 when I can just sell it for $30?

sodality23• 5 years ago

Before the negative comments for Buzzfeed come in, please check out their investigations: https://www.buzzfeednews.com/investigations

These are hard-hitting, actual journalist investigations that is absolutely on a different level than their regular content on the main site. It seems the ad revenue from the Bad Buzzfeed funds their investigative journalism.

Edit: Yes, even BuzzfeedNews.com is sort of bad - it's a mix. Below article linked from throwaway894345 is an example of a bad one but a lot of the articles on the main page seem to be legitimate news (if not as detailed as their investigations unit).

JohnWhigham• 5 years ago

And when ad revenue dries up, the first thing to be shuttered will be that.

sodality23• 5 years ago

Yeah, it's pretty unfortunate but I've got mixed feelings as clearly the model is not terrible, and they're still funding investigative journalism.

throwaway894345• 5 years ago

I remember Buzzfeed News stoking up drama whenever they could, but maybe they’ve turned a corner since I stopped paying them attention.

https://www.buzzfeednews.com/article/davidmack/first-they-ca...

PEOPLE ARE MAD. FURIOUS.

sodality23• 5 years ago

Yeah, if an article has single sentences of bold text between tweets or images, it's a Bad Buzzfeed article. That's definitely a prime example of crappy journalism. There's so many reasons why it's not good but when you realize it's marketed to 14-26 year olds, it makes a bit more sense.

1123581321• 5 years ago

Both sides of Buzzfeed deserve criticism.

6f4f06c00484d34• 5 years ago

some of buzzfeed is alright

well, I'm sure that some of dailymail, rt, breitbart, etc, is alright too. does it matter?

whatever that particular branch of that outlet is doing, it is owned by the same vile individuals as the rest of that conglomerate that sows division and discord for profit.

buzzfeed and its likes on both ends of the horseshoe deserve all the hate they get and more.

paul79864• 5 years ago

They were the first to pump out and up that Clinton paid for Steele Dossier / the dumb trump Pee pee tape thing. YEt they even noted it was not verified yet all left outlets picked it up and acted like it was nonfiction.

Anyone who believes that stuff (Hilary clinton pizza parlor pedo ring .. lmao to Hunter Biden narrative the right pushed lol) needs a life outside of for profit reality TV oops i mean for profit manipulated, biased media. There's zero objectivity with that garbage!

Think CNN might be trying to change it's course possibly with the firing of Coumo whose brother was probably forced out due to politics (Trump had it out for him). Not that I'd ever watch or read CNN or any of them again.

sofard• 5 years ago

Buzzfeed really feels like an "ends justify the means" kind of business. Cheap, tabloid news funding "real" journalism. There's merit to the idea, but under the financial pressure of a public corp, my money is that what little actual journalism they do will slowly die off.

RankingMember2• 5 years ago

Cheap, tabloid news funding "real" journalism. There's merit to the idea

I respect your opinion but I couldn't disagree more strongly. To me, an outlet publishing trash irrevocably taints anything else they're putting out, however hard-hitting and "real" it may be.

xwolfi• 5 years ago

This is completely false, I work in banking and I remember being super excited by the FinCEN files, but it was utterly ridiculous! They pumped it up just to tell you our own compliance department was reporting a lot of things... like dudes really, yes you got a leak of the official documents we send to the frigging regulator... this is the opposite of hiding things, I could not believe it.

And of course it had no effect because all it did was hamper investigations !! Absolute trash honestly :(

The poor girl who did the "podcast" to try to explain it sounded so ignorant, I was like "this person has no idea what a financial crime is or what a bank would do to hide it". "Look HSBC reported a drug cartel used it to do that and look look they told the regulator"... huuuuh... where's the problem here ? How is HSBC robbing anyone ? Is HSBC really complicit of selling drugs here ? :D (I do accept their critic HSBC's compliance dpt was slow in implementing the regulation)

mypastself• 5 years ago

They were starting to cultivate the image of publishing serious investigative journalism, but I stopped paying attention after the Steele Dossier debacle.

I’d have to peruse the links on that page more carefully to determine whether or not the content is worthwhile, but it’s telling that the latest featured longform article is over a year old. Likely a sign of where their priorities lie.

thenanyu2• 5 years ago

I don’t get why people buy into this narrative. 5-10% of the content the BF organization puts out is respectable. Ok, it’s still 90% trash. The markets are treating it as such.

marban• 5 years ago

BF ≠ BF News — Keep that in mind before the usual bashing.

errcorrectcode3• 5 years ago

The problem is branding. They should've changed their name or they get all they deserve.

RankingMember2• 5 years ago

Impossible to ignore that the parent is the same. If the root of a poisonous plant grows a few non-poisonous fruit, I'd still be staying away from the whole plant as a matter of course.

thenanyu2• 5 years ago

This meme needs to die.

BF doesn’t get to respectability-wash their garbage by hiring some former NYT employees.

BitwiseFool3• 5 years ago

I believe the fundamental problem with BuzzFeed is that it is built on a foundation of clickbait. Does clickbait work? Absolutely, but only for a while before people adapt to it. The reason is that clickbait is inherently disappointing. Truly interesting content does not need to be fluffed up, while most content on BuzzFeed is made to look more intriguing than it actually is.

I believe they are conditioning their users to be interested and then let-down after each article, listicle, video, piece of content, etc. They seem to be doing well in the short term, but I do not think their business model / hotness will last into the future.

errcorrectcode3• 5 years ago

Their business model should just shift to a 100% chumboxes model of clickbait. It would be more honest.

BitwiseFool3• 5 years ago

If they merged with Taboola and Outbrain, they could become a titan of worthless online muck!

donbrae• 5 years ago

Is BuzzFeed actually clickbait, though? If you mean that the headline makes you want to click to read the article, then I guess it is. But that’s no different to any website.

Looking at the home page just now, BuzzFeed doesn’t seem to make outlandish claims or promises in the headline or accompanying image that aren’t then delivered in the article.

It’s all pretty silly, of course, but the content seems to match the headline in the items I clicked on. This makes sense if the goal is to get folk sharing BuzzFeed content on social media: if the content was a letdown, it wouldn’t be shared.

I seem to remember Ben Thompson talking about this common misconception on his podcast years ago.

selfhoster11• 5 years ago

HN is basically a perpetual ner-snipe to me, yet I keep coming back year after year. Let-downs aren't sufficient to break the habit of coming somewhere.

BitwiseFool3• 5 years ago

I would say the difference is that as an aggregator, HN isn't crafting the content it displays here. I think the key is that making viral content is not something that scales and the content creators at BuzzFeed resort to using patterns, e.g. "North Koreans try American BBQ", "Mainland Chinese people try Panda Express", and dozens of other things. It doesn't help that they use clickbait thumbnails and article title tricks.

Sure, content here on HN can be it or miss but I think the diversity of the content is what saves it from the "Intrigue/Disappointment" loop that I suggested for BuzzFeed.

As a personal anecdote, my Gen-Z sister used to be glued to the screen with almost all of her tabs on BuzzFeed or BuzzFeed Video. She eventually grew bored of it and now spends her time on TikTok. She told me she felt like BuzzFeed started feeling too formulaic and familiar while TikTok is vastly more engaging / authentic. My personal hunch is that TikTok offers much more variety.

errcorrectcode3• 5 years ago

BuzzFeed can die a horrible death for all I care. Their rep is forever one below Maury Povich.

That decent shops like TruthDig went under because of arrogant owners/investors while TD lives is a travesty.

iso16312• 5 years ago

You wouldn't BELIEVE what company is going public

siruncledrew• 5 years ago

Buzzfeed reminds me of fast food, where there’s a few specials of options for show like “Look we have a salad! Look healthy!” but 98% of everything else produced is crap made as cheap as possible to sell it at volume.

Buzzfeed’s money maker is “fast-news, volume-articles”, and I expect investors to double down on that. They are not going to be ok with producing 6 high quality articles a month that take a ton of time to produce with a short window of monetizing when they could just pump out 1000 crappy articles a month and use those as hooks to siphon ad revenue from.

gumby• 5 years ago

I think they ended up raising $16MM rather than the $250MM they had planned on.

barbazoo• 5 years ago

I'm genuinely wondering what the motivation is of a company like BuzzFeed to go public. As far as I understand, going public is often done to raise capital to do expensive things you wouldn't otherwise be able to afford like R&D, innovation, infrastructure, etc. I can't see how that's necessary for a "newsroom" kind of operation that doesn't have or produce much tangible.

Kye• 5 years ago

Possibilities: cashing out before the music stops, regulatory requirement to go public, hope that an IPO pop could save a sinking ship.

cultofmetatron• 5 years ago

Buzz feed can die a slow agonizing death after all their "manspreading" bullshit.

Its largely a jobs program for ideological extreme leftist nutjobs. The worst part is it gives conservative outlets a tangible strawman to make their own toxic bullshit seem more nuanced than it is to their conservative base.

In the end we the people lose out.

BuzzFeed to go public, after shareholders approve SPAC deal

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