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After a challenging 2023, BuzzFeed Inc. will face a series of financial hurdles in the coming months that it will need to navigate deftly to ensure its stability.
The company will see $150 million of debt obligations come due in December in the form of convertible notes it raised in June 2021, according to public filings. It is also at risk of being delisted from the Nasdaq if it cannot boost its stock price before May 28, which would trigger a clause moving that payment date up to July.
The looming liquidity crunch comes after a series of disappointing quarters for the company—and for many other publishers—which has left its cash reserves depleted and its ability to finance its debts in jeopardy.
“BuzzFeed has done one thing well—build an audience—and two things poorly: Monetize that audience effectively and convert it to higher-paying products,” said David Clinch, vice president of partnerships at Mather Economics. “Programmatic advertising used to be a gravy train, but now it’s a hamster wheel and they need to find a way off of it.”
In third-quarter results reported in November, the company delivered $73 million in revenue, down 29% year over year, while the time readers spent on its properties dropped 19%. It posted a loss in the quarter of $13.7 million, and its losses for the first three quarters of 2023 totaled $77.6 million. The company had $42 million in cash as of September.
BuzzFeed did not respond to a request for comment.
Selling Complex and boosting value
If BuzzFeed were to be delisted, the change in status would trigger a default that could force it to repay its $150 million in debt obligations in July, according to public filings.
To prevent this, the company plans to sell Complex Media to social commerce platform Ntwrk, in a deal backed by Universal Music, as soon as next week, which will generate around $100 million in cash, according to a person familiar with the matter.
BuzzFeed had hoped that the sale would net $150 million, which it could use to pay down its convertible notes, but it was unable to secure its desired price, according to The Information.
