<p>BuzzFeed was once on the vanguard of digital media companies that were going to leapfrog traditional publishers and change how people watched and read news and entertainment — an ambition that it struggled to fulfill.</p>.<p>The company hoped to regain some of its momentum this year by listing its shares on the stock exchange. But that debut, on Monday, was disappointing, underlining how hard it will be for digital media companies to become the giants that they aimed to be.</p>.<p>Not only did BuzzFeed’s stock, which trades under the ticker BZFD, close down 11 per cent at $8.56 on its first day of trading after a brief early surge, the company also raised a lot less money than it had expected from the deal that put it on the stock market.</p>.<p>BuzzFeed’s management had placed a high priority on listing the company’s shares on a stock exchange. Executives argued that having publicly traded stock would allow the company to snap up other digital publishing businesses, attracting more readers and advertising revenue.</p>.<p>BuzzFeed’s business grew as it pioneered catchy ways — including listicles and quizzes — of attracting readers, and its news division won its first Pulitzer Prize this year. But it and other digital media businesses, which venture capital firms funded over the past decade, faced an increasingly tough advertising climate. At the same time, many of their early investors have been growing impatient and seeking to sell some or all of their stakes.</p>.<p>Going public could help address some of those pains, but it can also heap pressure on companies if they don’t meet the expectations of investors and analysts. And a stagnant or falling share price could make it next to impossible to go on a buying spree.</p>.<p>To go public, BuzzFeed merged with a special purpose acquisition company, or SPAC, a transaction that could have raised over $250 million to help finance acquisitions. But last week, the company revealed it had garnered only $16 million after a large number of shareholders in the acquisition company, 890 5th Avenue Partners, declined to participate in the merger and opted to recoup money they had invested. The company was able to borrow $150 million by selling convertible bonds — corporate bonds that can be exchanged for stock in the future at a certain price.</p>.<p>This article originally appeared in <em>The New York Times.</em></p>.<p><strong>Watch the latest DH Videos here:</strong></p>
<p>BuzzFeed was once on the vanguard of digital media companies that were going to leapfrog traditional publishers and change how people watched and read news and entertainment — an ambition that it struggled to fulfill.</p>.<p>The company hoped to regain some of its momentum this year by listing its shares on the stock exchange. But that debut, on Monday, was disappointing, underlining how hard it will be for digital media companies to become the giants that they aimed to be.</p>.<p>Not only did BuzzFeed’s stock, which trades under the ticker BZFD, close down 11 per cent at $8.56 on its first day of trading after a brief early surge, the company also raised a lot less money than it had expected from the deal that put it on the stock market.</p>.<p>BuzzFeed’s management had placed a high priority on listing the company’s shares on a stock exchange. Executives argued that having publicly traded stock would allow the company to snap up other digital publishing businesses, attracting more readers and advertising revenue.</p>.<p>BuzzFeed’s business grew as it pioneered catchy ways — including listicles and quizzes — of attracting readers, and its news division won its first Pulitzer Prize this year. But it and other digital media businesses, which venture capital firms funded over the past decade, faced an increasingly tough advertising climate. At the same time, many of their early investors have been growing impatient and seeking to sell some or all of their stakes.</p>.<p>Going public could help address some of those pains, but it can also heap pressure on companies if they don’t meet the expectations of investors and analysts. And a stagnant or falling share price could make it next to impossible to go on a buying spree.</p>.<p>To go public, BuzzFeed merged with a special purpose acquisition company, or SPAC, a transaction that could have raised over $250 million to help finance acquisitions. But last week, the company revealed it had garnered only $16 million after a large number of shareholders in the acquisition company, 890 5th Avenue Partners, declined to participate in the merger and opted to recoup money they had invested. The company was able to borrow $150 million by selling convertible bonds — corporate bonds that can be exchanged for stock in the future at a certain price.</p>.<p>This article originally appeared in <em>The New York Times.</em></p>.<p><strong>Watch the latest DH Videos here:</strong></p>