Buzzfeed (NASDAQ: BZFD) stock price is hovering near the lowest level on record as concerns about the digital media industry rose. The shares were trading at $0.5400, which is about 98% below its all-time high. It now has a market cap of more than $75 million, which is much lower than its all-time high of over $1.2 billion.
Vice Media files for bankruptcy
The biggest media news this week is the decision by Vice Media to file for bankruptcy. This is a major news event because Vice was once valued at more than $5.7 billion at its peak. The company listed assets and liabilities in the range of $500 million and $1 billion.
There are concerns about Buzzfeed, a company that competes with Vice Media. The most recent results showed that Buzzfeed’s revenue plunged by 27% to $67 million, driven by the ongoing shift towards short-form creator-led content.
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Advertising revenue plunged by 30% to $34.2 million while content fell by 33% to $21.6 million with branded content. Its commerce and revenue grew by just 6% to $11.3 million. Buzzfeed expects that the revenue will drop by between 24% to 29% to between $76 million and $81 million. The company said:
“We expect this revenue decline in conjunction with the fully executed cost savings announced in mid-April to result in adjusted EBITDA in the range of $0 million to $4 million.”
Buzzfeed has taken actions to deal with its financial crisis. For example, the company shut down Buzzfeed News as it shifts its focus to HuffPost. It is also slashing costs by laying off about 15% of its staff.
There is an elevated risk that Buzzfeed will find it in financing difficulties. The most recent results showed that its accounts payable jumped to $27.2 million while long-term debt jumped to $152.3 million. At the same time, the company’s total cash and investments dropped to $49.9 million.
Buzzfeed stock price forecast
BZFD chart by TradingView
The daily chart shows that the BZFD stock price has been in a strong bearish trend in the past few months. It has plunged from a high of $4.25 on January 27 to the current $0.53. The shares have moved below the important resistance at $0.6357, the lowest point on December 29. They remain below the 50-day exponential moving average.
Therefore, the Buzzfeed share price will likely continue falling as sellers target the next key support at $0.40, which is about 25% below the current level.
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