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

GettyImages 1071861718
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.'”

Read the original article on Business Insider

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

Read the original article on Business Insider