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BuzzFeed Inc‘s (NASDAQ:BZFD) share price rose by 137.42% to $0.52 in after-hours trading after the company revealed the sale of Complex Networks to NTWRK, a live-streaming video commerce platform.
The deal, valued at $108.6 million, will also result in a 16% reduction in BuzzFeed’s workforce.
What Happened: The all-cash transaction, announced on Wednesday, marks a significant decrease in the value of Complex Networks since BuzzFeed’s acquisition in December 2021. At that time, the pop culture media startup was purchased for nearly $300 million, more than double the current sale price, reported The Hill.
NTWRK, financially supported by LiveNation Entertainment and Main Street Partners, will also provide BuzzFeed with approximately $5.7 million for the use of its New York offices and other employment-related expenses.
BuzzFeed will also undergo a 16% workforce reduction as part of a planned strategic restructuring aimed at reducing the company’s expenses. This move is expected to make BuzzFeed “more agile, sustainable and profitable,” according to a company statement.
CEO Jonah Peretti stated, “The sale of Complex represents an important strategic step for BuzzFeed, Inc. as we adapt our business to be more profitable, more nimble, and more innovative.”
The deal will enable BuzzFeed Inc. to focus on its other brands, including news website HuffPost, food sites Tasty and First We Feast, and the “Hot Ones” series.
Since its inception in 2006 as a news, quiz, and games website, BuzzFeed has faced challenges in maintaining profitability amidst evolving media dynamics.
Why It Matters: This sale comes at a time when BuzzFeed, along with other digital media companies, is facing financial challenges. In January, it was reported that BuzzFeed was exploring the sale of its popular food-focused sites, Tasty and First We Feast, following a steep decline in its stock value. The company, once valued at $1.7 billion, had also divested its news operation and sought buyers for subsidiaries like Complex Networks.
This move by BuzzFeed is reflective of the broader struggles within the media industry. Other major players, such as The Los Angeles Times and Vice Media, have also faced significant downsizing amid a tough economic climate marked by reduced marketing budgets and declining paid subscriptions.
Photo by Matt Haughey via Flickr
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