Shares of BuzzFeed, Inc. (NASDAQ: BZFD) nosedived 40.7% to close at $2.23 on Monday after investors panicked over the news that the company’s lock-up period was lifted.
BuzzFeed went public in December last year after its merger with 890 Fifth Avenue Partners Inc, a special purpose acquisition company (SPAC). Its trading journey on the NASDAQ started on December 6, 2021.
Since then, BuzzFeed’s major investors (institutional) and executives were barred from selling any shares of the company held by them. This move is designed to prevent the company’s top officials and executives from flooding the market with extra shares, as it puts extra pressure on the company’s share price.
With the ban now lifted, any major stake sale by the company’s insiders will harm its share price. This fear seems to have weighed on the market sentiments on Monday.
Stock Rating
A few days ago, John Blackledge of Cowen reiterated a Buy rating on BZFD while decreasing the price target to $5 (124.22% upside potential) from $6.
Another analyst of Bank of America maintained a Hold rating on the company while lowering the price target to $4.50 (101.79% upside potential) from $5.50.
Overall, the stock has a Moderate Buy consensus rating based on one Buy and one Hold. BZFD’s price target of $4.75 suggests 113% upside potential from current levels.
Performance on TipRanks
According to TipRanks, the confidence signal of hedge funds is Neutral on BZFD. In the last quarter, hedge funds increased their exposure to BZFD by 627.3 thousand shares.
Meanwhile, TipRanks’ Crown Wisdom tool reveals that investors currently have a Neutral stance on the stock, as only 0.6% of portfolios tracked by TipRanks increased their exposure to the stock in the last 30 days.
Conclusion
Despite being in its nascent stage, BuzzFeed anticipates revenues to grow in the low 20% range in the second quarter of 2022. Further, the company has immense growth potential in the digital media space.
In May 2022, BuzzFeed’s Founder and CEO, Jonah Peretti, said, “…BuzzFeed, Inc. is increasingly well positioned to serve the growing demand for brand-safe, culturally relevant content, deepen our competitive moats, and help shape the next generation of the internet.”
Read full Disclosure
