The following week, on December 2nd, the Wall Street Journal reported that about ninety-four per cent of the $287.5 million that the SPAC had raised had been withdrawn by investors the BuzzFeed stock had been trading below its listing price, and it’s not uncommon of late for a SPAC to lose around sixty per cent of its money before going public. In an e-mail, BuzzFeed told former employees that they would be provided “step-by-step instructions in the next week or two of what will be required.” They were first contacted about the steps needed to convert their BuzzFeed equity into tradable stock the week of Thanksgiving, two weeks before the company went public. chair, Gary Gensler, expressed concern that “the investing public may not be getting like protections between traditional IPOs and SPACs” and that “misaligned incentives and conflicts might enrich certain parties at the expense of others.”įormer BuzzFeed employees have described a rushed process, one that potentially allowed more room for human error than a traditional I.P.O. began considering whether SPACs allowed companies to sidestep some financial disclosures by December, the agency had opened an investigation into former President Donald Trump’s use of a SPAC to launch a conservative media company.
“Every friend is launching a SPAC,” one billionaire told the Times in early 2021.
process-while making earnings projections that might prove misleading-they’ve become something of a recent trend on Wall Street. And, because they typically allow companies to go public more quickly than a traditional I.P.O.
They raise money from sponsors, investors willing to take a gamble on an unnamed acquisition target, in order to buy a private company. SPACs are sometimes referred to as blank-check companies. (A spokesperson for the company strenuously denied that any information was deliberately withheld from former employees.) In internal BuzzFeed Slack messages from Thursday, Peretti professed to be “very upset” at the turn of events.īuzzFeed’s June announcement noted that the company would be going public with a special-purpose acquisition company, or SPAC. Some of them are even investigating whether they could take legal action against their former employer. And they are raising questions about the structure that BuzzFeed used to go public. Some former employees are now asking whether they were cut out of trading owing to incompetence, or deliberately misled. Hopes of windfalls, large and small, were dashed. They watched in dismay as the share price dropped eleven per cent on the first day of trading as of Friday’s close, most were still unable to trade, and BuzzFeed stock was valued at $6.07, having dropped nearly forty per cent in the first week of trading. This past Monday, as BuzzFeed went public, many of them learned something alarming: they weren’t able to trade the stock that they had waited years to exercise. It was as close to a fairy tale as the modern media business allows: the downtrodden listicle-making masses could finally cut themselves in on a hot media deal.Īs it turned out, for many former employees, it was all too good to be true. A former employee told me that they knew of at least one early employee who stood to earn as much as a million dollars. In June, when BuzzFeed announced that it would be going public, looking to target a $1.5-billion valuation, the company’s co-founder and C.E.O., Jonah Peretti, told CNBC, “I think that really sets us up to be the consolidator in the media space with this amazing platform we’ve built, and now we can add more iconic brands.” Former employees, many of whom had worked for the company at low media-world salaries, eyeing tech-startup payouts someday, were chuffed at the prospect of turning their long-simmering equity into actual cash.
0 kommentar(er)
