BuzzFeed Inc, the digital media company, plummeted over 22% on its first day as a listed company after merging with special purpose acquisition company (SPAC) 890 5th Avenue Partners Inc.
Trading under the ticker ‘BZFD’, the shares began trading at US$10.99 after the merger and spiked 33% to US$14.62 before investors jumped ship, with the price closing the session at US$8.56.
BuzzFeed raised US$16mln in the merger, while also gaining access to the SPAC’s US$288mln of cash and roughly US$150mln in debt financing.
BuzzFeed claimed that the merger means that it is “the first publicly traded purely digital media company”.
CEO Jonah Peretti told Bloomberg: “The big thing digital media needs for consolidation is a strong public company and we wanted to be the first.”
Providing news and entertainment stories for 15 years, the company remains unprofitable despite making around half a billion dollars in revenue.