As concerns over the company continue, the stock price of BuzzFeed has lost some gains from earlier in the year. Vivek RAMASWAMY invested in the company a few month ago and it initially rocketed up to $4.5. The stock has fallen by nearly 50%, to $2.36. This brings its value to $85.
BuzzFeed has fallen from grace in the media
BuzzFeed has been dubbed as one of the most infamous fallen angels within the media world. It was once one of the most rapidly growing media companies. It received funding of almost $500,000,000 from Andreessen-Horowitz, NBCUniversal and others. The company was worth over $2 billion.
BuzzFeed belonged to a group of small media-tech companies, which were seen by many as disruptors of the industry. Several of these companies have lost their luster, and others are already bankrupt. Vice Media is a good example. It was worth over $5 billion in 2015 and filed for bankruptcy in May 2023.
Verizon was the other major name, and it assembled media companies such as AOL or Yahoo. The company then sold its business for $4.8 billion to Apollo Global.
BuzzFeed has struggled in recent years. This has led it to cut costs and sell off some parts of the business. The company sold Complex for $109 million earlier this year. This was a huge loss since they had acquired the business for $300 million. BuzzFeed closed down its news division and laid off hundreds of people.
BuzzFeed is challenged by the fact that people’s media consumption habits have changed over the last few years. The Washington Post, The Atlantic and other large media outlets are all affected by this trend.
Paramount Global, Warner Bros. and Warner Bros. are other traditional media firms. Discovery has also had to struggle. Paramount’s market capitalization, once over $30 billion dollars, is now less than 10 billion. Warner Bros valuation dropped from $50 billion down to $19 billion.
Platforms like Instagram, TikTok and X have disrupted these companies, becoming the primary source of news.
Advertisers have also changed the way they spend their budgets. It is easy to understand why media companies that are primarily focused on advertising struggled over the last few years.
BZFD’s business does not improve
BuzzFeed’s business has not improved. According to data from SimilarWeb, the site had more than 81.8 millions visitors in September. This represents a drop of 10% compared with the previous month. The trend is likely to continue in 2019.
BuzzFeed reported that its revenue fell by 24 percent in the second-quarter to $46,9 million. The decline in revenue was primarily due to a drop of 19% in advertising, and a drop of 48% in content revenues. The company’s revenue from commerce and other sources increased by about 7 percent during the third quarter.
Other key metrics have also continued to deteriorate. The average amount of time that users spend on the site has dropped by 5 percent to 71 millions hours.
Yahoo Finance data shows analysts are expecting BuzzFeed to have revenue of $75.6 million in the third quarter, which is a drop of 43% from last year’s same-period. The sale of Complex will be a part of the reason for this decline.
Analysts expect BuzzFeed to generate revenues of $252 millions this year and $336million the following year.
BuzzFeed has seen its performance decline in a year of elections when it was expected to be strong.
There are also signs of a decline in user engagement over the last few months. As an example, the number one trending article at the moment of this writing only has 71 comments. In the past such stories would generate thousands of user comments.
BuzzFeed Stock Price Analysis
TradingView BZFD Chart
On the daily chart, the BZFD has experienced a downward trend in recent weeks. It has fallen below both the Exponential Moving Averages (EMA) of 50 days and 200 days. The BZFD stock has moved down below both the 50-day Fibonacci Retracement and the orange descending trendline.
The stock is therefore likely to have a negative breakout, as the sellers will target $2, which was its low point in June. Earnings are expected to be released on November 12, which will act as a catalyst.
As updates are made, the post BuzzFeed Stock Analysis: Falling Website Traffic is a Big Risk may change.
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