BuzzFeed said Monday media entrepreneur Byron Allen will take over as the digital media company’s next CEO after he entered into a deal to buy a stake of about 52% in the digital media company for $120 million.
Shares of BuzzFeed soared about 156% in extended trading.
The company has been grappling with a cash crunch as advertisers increasingly shift spending to social media platforms such as TikTok and Meta Platforms’ Instagram.
Under the deal, Allen Family Digital will acquire 40 million BuzzFeed shares at $3 apiece, a 265.9% premium to Friday’s closing price.
BuzzFeed’s market capitalization stands at roughly $31 million, according to data compiled by LSEG.
Upon closing of the deal, BuzzFeed founder & CEO Jonah Peretti will handover charge to Allen and move into a newly created role as president of BuzzFeed AI.
The deal, expected to close by the end of the month, will be funded with $20 million in cash and a $100 million promissory note due five years after closing, carrying an annual interest rate of 5%, the company said.
BuzzFeed also reported a 12.4% decline in first-quarter revenue to $31.6 million, while its net loss widened to $15.1 million from $12.5 million a year earlier.
The company, which withheld its annual forecast, said it expects to provide an update on its financial outlook in the coming months.
BuzzFeed went public in 2021 through a blank-check merger that valued the company at about $1.5 billion. Its shares have fallen more than 98% since then.
