Last year, news and entertainment site BuzzFeed (NASDAQ:BZFD) went public with a $1.5B valuation. Today it’s worth only a fifth of that after falling over 40% on Monday.

🤯 In 2015, BuzzFeed’s valuation was $1.7B, and now it’s worth just over $300M.

What’s the big deal? After going public in the IPO and SPAC rush over the past two years, traditional media sites have struggled in the public markets. Personal finance site NerdWallet (NASDAQ:NRDS) is down 55% since going public in 2021.

Some didn’t even make it to the public markets — which may have saved them from the public slaughter BuzzFeed experienced:

• Competitor Vice Media’s plans to go public fell through last year.
• Forbes pulled the plug on its plans to go public at the end of May.

Internal issues: BuzzFeed saw losses growing by 294% and user engagement dropping by 4% in the first quarter. In March, the company downsized its news team — which had been losing money for years.

• BuzzFeed relied on acquisitions to fuel growth — acquiring HuffPost in 2020 and Complex Networks in 2021.
• Per Axios, declining margins will make it harder for BuzzFeed to fund future acquisitions — which BuzzFeed sees as essential to its long-term growth.

According to an article in the New Yorker, many early BuzzFeed employees took lower salaries for the prospect of hitting it big on their stock options. But on the day of going public, many realized they couldn’t sell.

One analyst pinnedBZFD

’s 40% drop on last week’s expiration of a six-month lockup period for Class A shares — allowing employees, insiders and institutional investors to sell (Insider).