May 11 - BuzzFeed announced that media entrepreneur Byron Allen has agreed to acquire a controlling stake in the company and will take over as CEO. Allen Family Digital has entered into a transaction to buy roughly 52% of the company for a total of $120 million, the company said.
The stock reaction was immediate: BuzzFeed shares rose about 156% in extended trading following the announcement.
Under the terms of the agreement, Allen Family Digital will purchase 40 million BuzzFeed shares at $3.00 per share, a price that represents a 265.9% premium to the stock's closing price on the prior Friday. Data compiled by LSEG shows BuzzFeed's market capitalization at roughly $31 million.
As part of the ownership change, BuzzFeed founder and current CEO Jonah Peretti will relinquish day-to-day charge of the company once the deal closes and will move into a newly created position as president of BuzzFeed AI.
The transaction is expected to close by the end of the month and will be financed with $20 million in cash and a $100 million promissory note. The note is due five years after closing and carries an annual interest rate of 5%, according to the company.
BuzzFeed has been facing pressure on its core business as advertising dollars migrate to social platforms, with advertisers increasingly allocating spending to apps such as TikTok and Instagram. The company reported a 12.4% decline in first-quarter revenue to $31.6 million and said its net loss widened to $15.1 million from $12.5 million a year earlier.
BuzzFeed withheld its annual forecast and said it plans to provide an update on its financial outlook in the coming months.
For context on the company's public-market history, BuzzFeed completed a public listing in 2021 through a blank-check merger that valued the company at about $1.5 billion. Since that listing, the company's shares have fallen more than 98%.
What the transaction contains
- Purchase of 40 million shares at $3 per share, totaling $120 million.
- Financing split: $20 million cash and a $100 million promissory note due in five years at 5% annual interest.
- Founder Jonah Peretti to transition to president of BuzzFeed AI upon closing.
Financial snapshot
- First-quarter revenue: $31.6 million, down 12.4% year over year.
- First-quarter net loss: $15.1 million, up from $12.5 million a year earlier.
- Company market capitalization: roughly $31 million, per LSEG data.
The company has signaled it will update guidance in the near term, but for now has held back an annual forecast as it navigates the ownership change and continuing advertiser shifts.