Shares of BuzzFeed plunged as much as 17 percent in their Nasdaq debut on Monday, after its merger with a blank-check company was hit by a flurry of investor withdrawals last week.
New York-based BuzzFeed’s stock opened up 14 percent at $10.95 but reversed course to trade as low as $8. By mid-afternoon, shares were down only 7 percent.
The company was one of the 10 trending stocks on Stocktwits.com, a platform commonly seen as a measure of interest from retail investors.
After shareholders redeemed a majority of their stake, BuzzFeed said last week it would receive only 6 percent, or nearly $16 million, of proceeds from the trust account of the blank-check company 890 Fifth Avenue Partners Inc., named after the fictional Avengers mansion.
Special purpose acquisition companies typically sell shares at $10 apiece, put the cash in a trust account and then search for a company to buy. Its shareholders can choose to redeem their shares in return for cash.
Tightening scrutiny from the Securities and Exchange Commission and saturated demand have weighed on the SPAC market, which soared in popularity last year.
BuzzFeed’s deal is a barometer of investor interest for peers like Vox Media, which is reportedly considering a SPAC merger. Magnum Opus Acquisition, the SPAC merging with Forbes, has been trading below its issue price of $10.
BuzzFeed also secured $150 million through a convertible note financing.
The company, which produces news, videos and online quizzes, was founded in 2006 by Jonah Peretti and John Johnson, and saw a rise in popularity among the youth.
In 2016, the company was valued at $1.7 billion after Comcast-owned NBC Universal’s investment.
BuzzFeed, which won a Pulitzer prize in June, bought news website HuffPost last year and also acquired youth entertainment company Complex Networks in June this year.