Left-wing outlet Buzzfeed has been threatened with delisting from the NASDAQ exchange after its share prices crashed below $1.
On May 31, Buzzfeed received a letter from NASDAQ notifying the firm that for the previous 30 consecutive business days, the bid price for the company’s common stock has closed below the minimum $1 required for continued listing.
“The Company has been provided an initial period of 180 calendar days, or until Nov. 27, 2023 (the ‘Compliance Date’), to regain compliance with the Bid Price Requirement,” the May 31 delisting notice reads.
Buzzfeed’s shares were trading at 66 cents as of 11:14 a.m. EDT on June 5, which is down by 10.22 percent year to date. Over the past year, the share has fallen by more than 70 percent.
“If, at any time before the Compliance Date, the bid price for the Company’s common stock closes at $1.00 or more for at least 10 consecutive business days … the Staff will provide written notification to the Company that it has regained compliance with the Bid Price Requirement,” the notice reads.
In case Buzzfeed fails to meet the bid price requirement by the compliance date, it can secure a second 180-calendar-day compliance period.
But to secure this, Buzzfeed will have to meet multiple criteria, including the standards for initial listing on the NASDAQ. The firm will also have to provide a written notice that it intends to meet the bid price requirement during this second compliance period.
“If the Company does not qualify for, or fails to regain compliance during, a second compliance period, then the Staff will provide written notification to the Company that its common stock will be subject to delisting,” the notice reads.
Financial Troubles
The drop in share price and delisting threat comes as Buzzfeed has been bleeding money over the past year. Although the company reported a 10 percent revenue jump in 2022, at $436 million, it still ended up with a net loss of $201.2 million for the year, a massive dip compared to the net income of $25.9 million in 2021.
In April, Buzzfeed announced that it was shutting down its news division as part of an effort to shave off 15 percent of its workforce. Jonah Peretti, CEO of BuzzFeed, blamed the situation on the “declining stock market,” a slowdown in digital advertising, and shifts in audience behavior.
“The reduction in workforce plan is part of a broader strategic reprioritization across the company in order to accelerate revenue growth and improve upon profitability and cash flow,” the company said in an April 20 U.S. Securities and Exchange Commission filing.
The 15 percent employee reduction in April followed a 12 percent cut in staff earlier in December 2022.
In January, Buzzfeed’s shares had briefly surged for a few days after the company revealed that it intended to use artificial intelligence tools such as OpenAI’s ChatGPT to produce content.
Since December 2021, following a merger with a special purpose acquisition company, Buzzfeed’s shares have tumbled. However, analysts still continue to see upside potential in the stock.
According to financial media firm MarketBeat, the consensus analyst price target for Buzzfeed stock is $1.88. Considering that shares of the company are presently trading at $0.66, there’s an almost 185 percent upside potential from current prices.
