The notoriously liberal outlet Buzzfeed may be hurtling toward bankruptcy amidst a mountain of debt according to a new report from The New Yorker.
The debt was reportedly the result of the company seeking a more diverse demographic by purchasing the rap site Complex for 150,000,000 dollars, which they borrowed from a series of Hedge funds.
However the bill appears to be coming due soon and the company has very few ways to pay its debt.
Regarding company’s finances, virtually nothing has transpired as intended: The social-media networks on which BuzzFeed relied for a significant portion of its traffic shifted to different types of content, the SPAC funding it has previously enjoyed decreased from nearly $290 million to approximately $16 million, and investors withdrew, causing the company’s stock price to plummet by 98 percent.
The bonds that Buzzfeed purchased in order to finance the Complex deal yield 8.5% annually for their holders and are redeemable for a marginal amount exceeding the initial loans.
As a result, the total outstanding debt resulting from the Complex deal has increased to approximately $200 million.
In spite of this, the company’s cash on hand is only $42 million, as of its most recent quarterly report. Furthermore, it is saddled with an additional $33.8 million in obligations.
Additionally, the company’s earnings report for the third quarter was unfavorable. Thirteen percent less time was spent on its websites. BuzzFeed also reported a net loss of nearly $14 million for the quarter, on account of a roughly one-third decline in advertising and content revenue to less than $59 million.
Over all the pictured painted by the report is a bleak one for Buzzfeed, and will may very well result in Bankruptcy in the near future if some other arraignment isn’t found quickly.
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