BuzzFeed (NASDAQ: BZFD) stock surged after the media company finalized the sale of its Complex division to NTWRK.
BuzzFeed (BZFD) has finalized the sale of Complex Networks to digital platform NTWRK for $108.6 million in cash. The deal, which includes an additional $5.7 million for BuzzFeed’s New York offices and related severance costs, marks a pivotal shift for the media giant as it restructures to focus on core brands.
BuzzFeed plans to trim its workforce by 16%, anticipating around $23 million in annual cost savings as a component of its strategic restructuring. This restructuring, scheduled for Wednesday, February 28, 2024, aims to reduce centralized expenses, fostering agility and profitability within the company.
The cash influx from the Complex sale will be allocated towards various financial initiatives to fortify BuzzFeed’s balance sheet and enhance liquidity. These initiatives include redeeming $30.9 million of convertible notes due in 2026, settling a $35.5 million revolving credit facility, financing the impending strategic restructuring, and optimizing working capital.
BuzzFeed Inc.’s CEO, Jonah Peretti, said the sale would help make BuzzFeed and its other brands like HuffPost, First We Feast, and Tasty more profitable. He also acknowledges the growth opportunities for Complex under NTWRK’s commerce-focused business model.
BuzzFeed Q4 Revenues Forecast
This divestiture comes in the wake of a reevaluation of fourth-quarter financial forecasts. BuzzFeed expects fourth-quarter revenues, excluding Complex contributions, to range between $73 million and $78 million, with adjusted EBITDA estimated between $15 million and $20 million.
BuzzFeed acquired Complex Networks in December 2021 for $198 million in cash and equity. The recent sale to NTWRK doesn’t involve First We Feast and its well-liked show Hot Ones, which will continue to be part of BuzzFeed.
The company plans to release its full-year 2023 financial results after the market closes on March 25, 2024. The results will be accompanied by a conference call led by CEO Jonah Peretti and CFO Matt Omer.
BuzzFeed (NASDAQ: BZFD) Stock Price Action
BZFD stock jumped 58.10% to close at $0.35 on Thursday. The traders had exchanged hands with 91,524,682 (91.52 million) shares compared to the average daily trading volume of 2.75 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
