Shares Magazine 07 July 2022

FEATURE

BuzzFeed and LADbible get plenty of clicks but their shares have been a flop Investors are worried about a slowdown in advertising

T

wo companies at the cutting edge of modern media have got hundreds of millions of people devouring their stories. They’ve become kings of content which goes viral, with users reposting articles and video clips across social media. Big viewer numbers are music to the ears of advertisers who are eager to push products in front of all these people digesting the viral content. On this basis, you might expect the owners of media outlets BuzzFeed and LADbible to be interesting investments. The market says otherwise, with shares in both companies having been a disaster. BuzzFeed (BZFD:NASDAQ) went public on 6 December 2021. The shares opened 14% higher on day one at $10.95 but have since fallen by 86% to $1.54. Last month they fell by 41% in a single day after restrictions were lifted on staff and major shareholders being able to sell stock. LADBible publisher LBG Media (LBG:AIM) joined the UK stock market a week after BuzzFeed, listing at 175p on 15 December 2021. Today those shares trade 39% lower at 106.12p.

WHY HAS BUZZFEED FLOPPED? BuzzFeed’s popularity is dissipating. The time users spent engaging with its content declined by 4% during the first three months of this year compared to 2021. The group also suffers from having gone public via a special purpose acquisition vehicle, also known as a SPAC.

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Chart: Shares magazine • Source: Refinitiv