Silicon Valley Bank Pulls The Plug On BuzzFeed

BuzzFeed, Inc. released its financial position for 2020 and Q4 on Monday; it revealed a sizable net loss but kept the bulk of its cash reserves with Silicon Valley Bank (operating up until their close). This alarming data is just one more illustration of how quickly and dramatically the economic environment changed last year.

In a joint statement, the US Department of the Treasury, the Federal Reserve, and the FDIC assured depositors that their money would be safe even if the bank failed. Together, they are dedicated to maintaining customers’ peace of mind, underscoring their unshakable commitment to financial security in tumultuous times.

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In a blog post, Jonah Peretti, the founder and CEO of BuzzFeed, acknowledged that the firm had a particularly challenging fourth quarter: “There’s no denying that 2022 was a tough year for digital media. The challenges we faced in Q4 are also impacting us in Q1 2023, and it is clear we have more work to do to realize the full potential of our combined brand portfolio.”

“As we work to address these challenges, our value proposition continues to resonate strongly in the marketplace,” he continued. “With iconic brands, a massive audience and a differentiated technology platform, we occupy a unique position in the ecosystem of audiences, creators, platforms and advertisers. And, our work in the exciting new areas of creators and artificial intelligence are continuing to lead the way in defining the future of media.”

The business suffered a loss of “$201.3 million, including a non-cash goodwill impairment charge of $102.3 million, compared to net income of $25.9 million in 2021.” According to The Hollywood Reporter “During the latest quarter, BuzzFeed posted a non-cash goodwill impairment charge of $102.3 million, in part due to a steep decline in the value of the company’s stock price in Dec. 2022.” Buzzfeed had total sales of $134.6 million in the fourth quarter. The digital media company ended the quarter with $106 million in net losses, compared to a year-earlier profit of $41.5 million.

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According to the report, BuzzFeed had over $56 million in cash and cash equivalents at the end of the year, with the majority of those funds being kept at Silicon Valley Bank: “As of March 10, 2023, the majority of the Company’s cash and cash equivalents balance were held at Silicon Valley Bank. However, in a joint statement released by the US Department of the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation, the U.S. government reassured that all depositors will be fully protected. The Company is accessing its funds and does not currently anticipate any disruption to its ongoing operations.”