NEW YORK - BuzzFeed, Inc. (NASDAQ: BZFD) has announced a reverse stock split of its Class A and Class B common stock in a move to comply with Nasdaq's minimum bid price requirement. The 1-for-4 stock consolidation is set to take effect on May 6, 2024, and is aimed at ensuring the company's continued listing on the Nasdaq Capital Market.
The adjustment will not change the proportionate equity interests of stockholders, except for the elimination of fractional shares, which will be rounded up to the nearest whole share. The total number of Class A common stock shares will be reduced from roughly 140.96 million to about 35.24 million, and Class B from approximately 5.47 million to around 1.37 million. The total authorized shares of common stock will remain unchanged.
This corporate action will also proportionately adjust outstanding warrants, options, and restricted stock units (RSUs), as well as shares available under the company's equity incentive and employee stock purchase plans. Additionally, it will affect the number of shares issuable upon conversion of the company's unsecured convertible notes due in 2026 and the shares available for its at-the-market offering.
The company's trading symbol "BZFD" will remain the same post-split, and the warrants will continue to be traded under the symbol "BZFDW." The CUSIP number for the Class A common stock will change to 12430A300.
Continental Stock Transfer & Trust Company will manage the exchange process for the reverse split. Stockholders with physical certificates will receive instructions on exchanging their shares, while those holding shares in street name or in book-entry form will have their accounts automatically adjusted by their financial institutions.
This strategic step by BuzzFeed, a company that has become synonymous with internet culture since its inception in 2006, reflects its efforts to maintain its listing status and adhere to market regulations. The information is based on a press release statement.
InvestingPro Insights
BuzzFeed, Inc.'s (NASDAQ: BZFD) decision to execute a reverse stock split comes at a time when the company is grappling with significant market challenges, as reflected in the data and analysis available on InvestingPro. With a market capitalization of just $47.38 million, the digital media giant is trading at a low Price / Book multiple of 0.48, suggesting that the market values the company at less than half of its book value as of the last twelve months ending Q4 2023.
An InvestingPro Tip highlights that analysts are not expecting BuzzFeed to be profitable this year. This aligns with the company's reported operating income, adjusted for the same period, which stands at a loss of $32.22 million, indicating operational challenges. Moreover, BuzzFeed's revenue has declined by 26.24% over the last twelve months, which could be a factor behind the reverse stock split decision as the company seeks to shore up investor confidence and comply with Nasdaq's listing requirements.
However, not all indicators are negative. Analysts anticipate sales growth in the current year, which could signal a potential turnaround for BuzzFeed. Additionally, the company has experienced a strong return over the last three months, with a 120.4% price total return, showing some recovery in investor sentiment.
For readers interested in a more comprehensive analysis, there are additional InvestingPro Tips available for BuzzFeed, which can offer deeper insights into the company's financial health and market performance. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for access to these valuable tips. There are a total of 13 InvestingPro Tips that can help investors understand BuzzFeed's financial nuances and investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.