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Photo by Charley Gallay/Getty Images for BuzzFeed

BuzzFeed is set to become publicly traded on Monday, after shareholders of a SPAC called 890 Fifth Avenue Partners voted to approve a previously-announced merger.

Yes, but: The vast majority of the money the SPAC raised in January was yanked, a signal that investors aren't very optimistic about BuzzFeed's future prospects.

  • SPAC investors, many of whom buy in before the acquisition target is disclosed, are allowed to redeem before the deal closes.

Details: BuzzFeed said in an SEC filing following the vote, “the transaction is expected to raise at least $166.2 million," with about $150 million coming from convertible debt financing and $16.2 million from investor cash.

  • That $16.2 million of investor cash is 94% less than the $287.5 million the SPAC raised in its IPO in January.

Be smart: While it's become more common in the past few months for SPAC investors to redeem prior to SPAC mergers, the BuzzFeed deal saw investors pull out at a higher rate than average.

  • The Wall Street Journal noted that, since July, the average SPAC "has lost about 60% of its money before its deal goes through, up from roughly 25% in the first seven months of the year."

The big picture: Once the company begins publicly trading on the Nasdaq next week, existing BuzzFeed investors will finally be able to cash out. Many have waited more more than a decade.

  • BuzzFeed wanted to go public prior to the pandemic, but lost momentum due to headwinds impacting the entire digital media landscape.
  • At least one of BuzzFeed's investors, NBCUniversal, has reportedly expressed concern that BuzzFeed's target valuation for the SPAC IPO is too low.
  • BuzzFeed’s previously-announced acquisition of Complex Networks for $300 million in cash and stock is expected to close on Friday, which also is when the SPAC merger becomes effective.

Between the lines: Members of BuzzFeed News' union staged a digital walkout on Thursday, ahead of the shareholder vote. The walkout caused tension between union members and management, but didn't impact the SPAC merger vote.

  • A spokesperson for BuzzFeed told Axios earlier Thursday there's "a bargaining session planned for next Tuesday where we hope the union will present a response on these issues."

What's next: Digital media firms considering going public will be closely eyeing BuzzFeed's stock market debut to see how investors will respond.

Go deeper

Jan 12, 2022 - Economy & Business

D.C. journalists launch media startup called "Grid"

Grid

A group of D.C.-based journalists on Wednesday launched a new media company called "Grid" that focuses on hard news analysis and investigative reporting.

Why it matters: Grid debuts amid a flurry of new media companies looking to reach a similar audience of wealthy, elite professionals.

FDA limits use of Regeneron and Lilly COVID antibody treatments

A coldbox containing monoclonal antibody treatments at a Regeneron clinic in Pembroke Pines, Florida, in August. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

The FDA said Monday it's limiting the use of two monoclonal antibody therapies as COVID-19 treatments because data indicates they're "highly unlikely" to be effective against the dominant Omicron variant.

Driving the news: The FDA revised the authorizations for Regeneron and Eli Lilly "to limit their use to only when the patient is likely to have been infected with or exposed to a variant that is susceptible to these treatments," per a statement from the agency.

Updated 3 hours ago - World

Pentagon: 8,500 troops on high alert for possible deployment to eastern Europe

Photo: Anna Moneymaker/Getty Images

Defense Secretary Lloyd Austin has placed 8,500 U.S. troops on "heightened preparedness to deploy" to eastern Europe in case NATO activates its rapid-response force over tensions with Russia, the Pentagon announced Monday.

Why it matters: No decisions have been made to actually deploy U.S. forces, but the heightened alert level will allow the military to rapidly shore up NATO's eastern flank in the event that Russia invades Ukraine. The Pentagon warned that Russia has shown "no signs of de-escalating," and continues to amass troops on Ukraine's borders.