'Clickbait' BuzzFeed in the US Finally Sells Subsidiary... Stock Price Doubles in 'Reversal'

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US online media BuzzFeed (BZFD) has sold its subsidiary media Complex Networks to e-commerce company NTWRK. As a news platform specialized in social networking services (SNS), it had grown its revenue model by attracting the interest of Millennials and Generation Z, but growth has been repeatedly hindered. Following the announcement of a major business restructuring after the Nasdaq market closed on the 21st (local time), BuzzFeed's stock price more than doubled in after-hours trading.

According to BuzzFeed, the sale price of Complex Networks was $108.6 million. The sale took place 2 years and 2 months after BuzzFeed acquired Complex Networks. Complex Networks was founded by fashion designer Mark Malkoffski. Additionally, BuzzFeed announced a restructuring plan to cut 16% of its total workforce. BuzzFeed expects this reduction to save $23 million annually in costs.

BuzzFeed's operating profit for the last four consecutive quarters was only between $73 million and $78 million, falling short of market expectations.

Founded in 2006, BuzzFeed had been recognized as a media outlet specialized in social networking services such as Facebook and Instagram. It was analyzed that its listicle (list + article) format content, such as "10 Things You Need to Know About ○○," effectively stimulated the curiosity of younger generations. At one point, it recorded the highest number of online visitors among global media outlets, drawing scrutiny from traditional media like The New York Times (NYT).

However, its influence began to decline due to ongoing controversies over fake news and clickbait headlines, as well as the emergence of new competing media outlets. Above all, as high interest rates persisted after COVID-19, companies reduced their media advertising budgets, leading to a slump in internet advertising business, which was considered a decisive blow. BuzzFeed had previously abolished its news division following a large-scale restructuring last year.

Meanwhile, after the announcement on the day, BuzzFeed's stock price surged 137% in after-hours trading. This appears to reflect expectations that performance may improve due to the extensive restructuring. Since its listing on Nasdaq in 2021, BuzzFeed's stock price has plummeted 98% from its peak.

This content was produced with the assistance of AI translation services.