- BuzzFeed is in talks to go public via a merger with 890 Fifth Avenue, Bloomberg reported Wednesday.
- The latter company 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 Fifth Avenue Partners, Bloomberg reported Wednesday.
The terms of the deal aren’t publicly known, and talks are ongoing and can still fall apart, according to Bloomberg.
BuzzFeed and 890 Fifth 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 last month, before laying off 47 staffers earlier this week.
Jonah Peretti, who cofounded BuzzFeed and serves as the CEO of the two companies, told staffers the layoffs were meant to “enable HuffPost to break even this year and eventually be profitable” after losing $US20 ($26) million last year and being on track to post similar losses again in 2021.
BuzzFeed also furloughed about 70 employees last year, including roughly 20 BuzzFeed News employees, during negotiations with its editorial union as it sought to cut losses across the company. BuzzFeed eventually laid off 50 employees in total, about 6% of its workforce, according to The Wrap.
In its initial public offering in January, 890 Fifth Avenue raised $US287.5 ($373) million, according to a press release. The “blank-check” company, which is named after the fictional Avengers mansion, said it planned 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 to the traditional 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 there could be a SPAC bubble, which triggered 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 the SPAC boom had 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 had 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.'”