Buzzfeed is being forced to tighten its belt (again) by axing its BuzzFeed News app, which comes a little more than a week after reports indicated the money-losing news organization would shut down its newsroom.
On Friday evening, the BuzzFeed News app posted its final notification:
“Well, folks, today’s the last day of the BuzzFeed News app. Thanks for the memories and see y’all out there.”
The app’s demise comes after the company released abysmal first-quarter results. CNBC noted several large investors urged BuzzFeed CEO Jonah Peretti to shutter the company’s newsroom — what a novel idea to reduce expenses as the company loses more than $10 million a year.
In February, a hiring freeze was reported as investors were furious with the media company’s lack of profitability, ill-advised shopping spree of other media firms, and crashing stock price post-SPAC debut.
Investor redemptions have occurred concurrently as the share price has been halved since the SPAC debut in December.
BuzzFeed’s downward spiral is particularly troubling for Peretti’s buying spree of media companies without a robust valuation. The firm recently bought out Complex and the Huffington Post, two deals that have yet to pay off in terms of revenue.
And as management claimed in a recent presentation to investors, it has grandiose ambitions of expanding its commerce business and its advertising and content businesses.
Troublingly, the abysmal performance of the company’s stock price has placed this post-SPAC growth strategy – hoovering up other failing digital brands – further out of reach (since Buzzeed’s stock is the currency it was supposed to depend on).
The death of BuzzFeed’s News app and newsroom, along with a hiring freeze, may only suggest the money-losing media company is in dire straits.