BuzzFeed in talks to go public through merger with 890 5th Avenue, a SPAC focused on media and telecom

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BuzzFeed News headquarters.

  • BuzzFeed is in talks to go public via a merger with 890 5th Avenue, Bloomberg reported Wednesday.
  • 890 5th Avenue is a special purpose acquisition company focused on media and entertainment.
  • The deal talks are not finalized and could still fall apart, according to Bloomberg.
  • See more stories on Insider’s business page.

BuzzFeed is considering going public through a merger with the special purpose acquisition company 890 5th Avenue Partners, Bloomberg reported Wednesday.

The terms of the deal aren’t publicly known at this point, and talks are ongoing and could still fall apart, according to Bloomberg.

BuzzFeed and 890 5th Avenue did not immediately respond to requests for comment on this story.

BuzzFeed, a New York City-based digital media company, was founded in 2006 and completed its acquisition of HuffPost from Verizon in February, before laying off 47 staffers earlier this week.

Jonah Peretti, who cofounded BuzzFeed and serves as CEO of the combined companies, told staffers the layoffs were meant to “enable HuffPost to break even this year and eventually be profitable,” after losing $20 million last year and being on track to post similar losses again in 2021.

BuzzFeed also furloughed around 70 employees last year, including around 20 BuzzFeed News employees, during negotiations with its editorial union as it sought to losses across the company. BuzzFeed eventually laid off 50 employees in total, around 6% of its workforce, according to The Wrap.

890 5th Avenue raised $287.5 million through its initial public offering in January, according to a press release. The “blank check” company, which is named after the fictional Avengers mansion, said it plans to focus on media and entertainment businesses.

SPACs typically aim to first secure a stock-market listing and then acquire a private company, offering businesses an alternative way to go public than the traditional initial public offering (IPO) process. SPACs have skyrocketed in popularity over the past year, with 130 having gone public this year alone – more than in the first nine months of 2020.

But the boom has sparked concerns that there could be a SPAC bubble, triggering a recent wave of sell-offs.

The think tank Americans for Financial Reform and the Consumer Federation of America told Congress in a February letter that the SPAC boom has been “fueled by conflicts of interest and compensation to corporate insiders at the expense of retail investors.”

SPACs have also received pushback from investors such as Warren Buffett’s business partner Charlie Munger and Chris Sacca – an early investor in Uber, Twitter, and Instagram – who recently said he has received multiple invitations to sit on the boards of SPACs with the expectation that “you’ll get [lots of shares] for just putting your name on it and doing nothing.'”

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Layoffs hit HuffPost

Hi and welcome to this weekly edition of Insider Advertising, where we track the big stories in media and advertising.

Remember you can sign up to get this newsletter daily here.

This week:


Jonah Peretti
Jonah Peretti

HuffPost layoffs

Layoffs are hitting HuffPost, just weeks after the publisher was acquired by digital rival BuzzFeed, Steven Perlberg reports.

The layoffs involve nearly 50 in the US and fulfill fears of staffers when the two companies combined to get profitable and surmount business challenges wrought by the pandemic.

BuzzFeed is trying to get HuffPost to break even after it lost more than $20 million last year, CEO Jonah Peretti said.

Read more: BuzzFeed is making layoffs at HuffPost weeks after it acquired the company


Jeremi Gorman CBO Snap


How Snap came back

Just a few years ago, people were ready to write Snap’s obituary. User growth had plateaued and it started to look like just another social platform as rivals copied its features.

But Snap looks pretty different now from platforms like Facebook and TikTok that are enmeshed in privacy controversies. And as Tanya Dua, Lara O’Reilly, and Dan Whateley report, it’s providing the service demanded by advertisers that was missing from its early days.

“Snap is on the consideration set again,” said Amanda Grant, global head of social at WPP’s GroupM.

Of course, there are threats around every corner, like Apple’s clampdown on ad targeting on its devices, TikTok, and maybe a new platform that hasn’t even launched yet.

But for now, Snap is enjoying the spotlight.

Read their full story: Snap is on a growth tear. Here’s how the once flailing company got advertisers to fall in love with it and reversed a sales slump.


clubhouse app
A user of the social media app Clubhouse shows her smartphone with the logo of the audio application.

Media startups to watch

Just a couple years ago, investors were obsessed with media startups centered on sports, subscription payments, and in-person events.

The global pandemic has transformed how people live in many ways – as evidenced by new high-flying media startups like audio app Clubhouse and Fable, a social-reading app.

The pandemic’s impact is also informing the kinds of media startups in vogue now.

VCs told Ashley Rodriguez and Dan Whateley they’re betting on startups that mix media with commerce, focus on social issues or mental wellness, facilitate sports betting, and bring in-person experiences online.

Read more: 19 media startups that VCs say are poised to take off in 2021, as trends like newsletters and sports betting surge

Other stories we’re reading:

Thanks for reading, and see you next week!

– Lucia

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Students from Rep. Madison Cawthorn’s college said he used ‘fun drives’ to corner women with sexual advances, report says

Madison Cawthorne
Rep. Madison Cawthorne (R-North Carolina).

  • Former classmates of Rep. Madison Cawthorn told BuzzFeed news he harassed women at their college.
  • Two RAs said they warned women residing in their dorms not to go on drives with Cawthorn.
  • Cawthorn previously said that he has “never done anything sexually inappropriate in my life.”
  • Visit the Business section of Insider for more stories.

Rep. Madison Cawthorn’s former classmates said he would use his car to corner women with sexual advances in off-campus drives, according to a BuzzFeed News investigation.

Students said that Cawthorn, a 25-year-old Republican from North Carolina, was known for this behavior while at Patrick Henry College, a small Christian school in Virginia that the lawmaker briefly attended in the fall of 2016.

Two resident assistants said they would warn women in their dorm not to go for rides with Cawthorn in his white Dodge Challenger. Cawthorn reportedly referred to these rides as “fun drives.”

“I got info from other RAs to warn the female student body not to go on joy rides with him because bad things happened on those joy rides,” Giovanna Lastra, one of the former RAs, told BuzzFeed.

One woman, Caitlin Coulter, recalled going on a drive with Cawthorn in which he asked invasive questions about the purity ring she was wearing. After 20 minutes of refusing to answer his questions, his demeanor changed and he drove dangerously back to campus.

Others told BuzzFeed that Cawthorn was frequently aggressive or misogynistic and that he called one woman a “little blonde slutty American girl” in front of a table of her peers. He also allegedly asked other men about which “race of girls gives the best blowjobs.”

BuzzFeed’s investigation comes after other allegations were made before the freshman representative was elected in November of last year.

In August of 2020, World Magazine reported that one woman, Katrina Krulikas, said Cawthorn had forcibly kissed her in 2014, when Cawthorn was 19 and she was 17. 

On a drive, Cawthorn asked Krulikas questions about whether or not she had sex before pressuring her to sit on his lap. He attempted to kiss her but she turned away. Cawthorn then tried again, holding her face, causing her to struggle to jump out of his lap.

During a campaign event in September 2020, Cawthorn denied the report, saying “I have never done anything sexually inappropriate in my life,” the Citizen Times reported.

However, Cawthorn apparently apologized to Krulikas in a text from February 2020 after a friend of hers mentioned the incident in response to one of his campaign texts. “I can see in hindsight how that was over the line and I am sorry,” he wrote.

Cawthorn has also come under scrutiny for questionable claims he has made about his past, including that he was training for the Paralympic Games and that the accident that put him in a wheelchair was the reason he could not atttend the Naval Academy.

Read the original article on Business Insider

Media faces upheaval – and deal opportunity

Hi and welcome to this weekly edition of Insider Advertising, where I break down the big media and advertising stories.

It’s also our last newsletter until Dec. 30. But you can always sign up here to get this newsletter in your inbox daily.

This week: Media deals heat up, tensions at Roku, and big tech privacy battles.

Ben Lerer
Ben Lerer

What’s next for media M&A 

The pandemic and rise of streaming video have wreaked havoc on the media and ad industries – and also paved the way for a lot of deal-making:


FILE PHOTO A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company's IPO at the Nasdaq Market in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid
FILE PHOTO A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company’s IPO at the Nasdaq Market in New York

Tensions at Roku

It’s been a transformative year for Roku, which has gone a small-but-mighty maker of streaming boxes to aggressively growing a TV platform business.

But as Ashley Rodriguez writes, its shift from a pure-tech player to an ad-driven business has come at a price.

Roku’s move into advertising has led to public spats with streamers like NBCUniversal’s Peacock and WarnerMedia’s HBO Max, riled some publishers, and irked some of its tech-side employees.

Read the details here: Roku insiders detail how it beat out Amazon and Google to dominate streaming TV and expand its ad business, but created new challenges and rankled some partners


Sundar Pichai
Alphabet CEO Sundar Pichai

Google, Facebook, privacy battles 

The tech giants’ jockeying to position themselves as the most pro-privacy is resulting in some very public spats.

  • Google has come under scrutiny for dominating in digital advertising, search, and how the web itself looks, Shona Ghosh reported. Critics’ central complaint has to do with Google’s features that potentially threatens people’s personal information.
  • Facebook for its part is battling Apple over its anti-ad tracking plans, saying they’ll harm small businesses as well as its own ad revenue. (Facebook meanwhile is expanding tools to protect high-profile users’ accounts)

One short-term beneficiary of all this: The publishers getting ad dollars from Facebook’s lobbying effort.


Other stories we’re reading:

Happy holidays, and I’ll see you in the New Year!

– Lucia

 

Read the original article on Business Insider