Visit our website for more: https://www.overlookedalpha.com<br /><br />If you are looking for a depressing stock chart, then BuzzFeed would do great. Since its public debut through a SPAC (special purpose acquisition company), its share price is down more than 90%.<br /><br />Unlike its competitors, BuzzFeed is focusing most of its content on Gen Z and Millennial audiences by creating content in short forms. The management puts a lot of attention to metrics that relate to the # of Reels and Shorts views, as well as the output of short form vertical videos on TikTok, Instagram, and YouTube.<br /><br />Other than its flagship BuzzFeed brand, the company owns the food brand Tasty, HuffPost (which was acquired in February 2021), as well as Complex Networks (acquired in December 2021).<br /><br />Although all of this might sound great, if we take a closer look at the financials, it seems that BuzzFeed is struggling to meet ends.<br /><br />Its revenue keeps growing ($321m in 2020 $437m in 2022), but the operating profit (excluding impairment expense as a one-off) decreased from positive $12m to negative $80 million. This represents a negative operating margin of -18%!<br /><br />What has changed over these few years?<br /><br />One of the main reasons for this decline is the drop in their gross margin, from 56% to 40%. The gross profit that the company is generating is not sufficient to cover the Sales and Marketing and the General and Administrative expenses.<br /><br />#investing #stocks #stockstowatch #finance
