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BuzzFeed investors have pushed CEO Jonah Peretti to shut down entire newsroom, sources say

BuzzFeed investors have pushed CEO Jonah Peretti to shut down entire newsroom, sources say
  • Several large shareholders have urged BuzzFeed CEO Jonah Peretti to shut down the company’s news organization.
  • BuzzFeed News has won awards, including a Pulitzer Prize, but is now shrinking through voluntary buyouts.
  • BuzzFeed News has about 100 employees and loses roughly $10 million a year, according to people familiar with the matter.

BuzzFeed is shrinking its money-losing news organization, the company announced Tuesday, amid what people familiar with the matter describe as broader investor concern that the division is weighing down the company.

Several large shareholders have urged BuzzFeed founder and CEO Jonah Peretti to shut down the entire news operation, said the people, who asked not to be named because the discussions were private. BuzzFeed declined to comment.

BuzzFeed’s stock closed over 6% higher at $5.27 on Tuesday.

BuzzFeed News, which is part of its content division, has about 100 employees and loses roughly $10 million a year, two of the people said. The company, which also has advertising and commerce divisions, said Tuesday its full-year content revenue grew 9% in 2021 to $130 million.

One shareholder told CNBC shutting down the newsroom could add up to $300 million of market capitalization to the struggling stock. The digital media company went public via a special purpose acquisition vehicle in December. The shares immediately fell nearly 40% in their first week of trading and haven’t recovered.

Peretti has been a vocal champion of the importance of BuzzFeed News for years, calling it “good for the world, good for business, and good for our company culture.” The organization’s newsroom has won several awards, including a Pulitzer Prize and a George Polk Award.

“This morning we announced plans to accelerate profitability for BuzzFeed News, including leadership changes, the addition of a dedicated business development group, and a planned reduction in force,” Peretti said Tuesday. “We will prioritize investments around coverage of the biggest news of the day, culture and entertainment, celebrity, and life on the Internet.”

The company has offered voluntary buyouts to fewer than 30 employees, according to a person familiar with the matter, who asked not to be named because the decision is private. The buyout is only available to reporters and editors who cover investigations, inequality, politics or science and have worked for the company for more than a year. BuzzFeed plans to make the buyout proposal to the NewsGuild of New York regarding its U.S. staffers.

Rather than shut down BuzzFeed News, Peretti is attempting to make the division profitable. He has a ready-made template: He made the decision to lay off 70 HuffPost staffers last year after acquiring the company from Verizon Media.

“Though BuzzFeed is a profitable company, we don’t have the resources to support another two years of losses,” Peretti said at the time. “The most responsible thing we can do is to manage our costs and ensure BuzzFeed — and HuffPost — are set up to prosper long-term. That’s why we’ve made the difficult decision to restructure HuffPost to reach profitability more quickly. Our goal is for HuffPost to break even this year.”

HuffPost is now profitable, according to a person familiar with the organization.

Editor-in-chief departs

Ahead of the job cuts, Mark Schoofs, BuzzFeed News’ editor-in-chief, told staff Tuesday he’s leaving the company. Samantha Henig, BuzzFeed News’ executive editor of strategy, will run the newsroom on an interim basis.

Deputy Editor-in-Chief Tom Namako and Ariel Kaminer, executive editor of investigations, are also resigning. Namako is joining NBC News’ digital operation as executive editor.

In its fourth-quarter earnings release, Buzzfeed said quarterly revenue grew 18% year over year to $146 million. Profit rose to $41.6 million, up 29% from the same period the year before.

Full-year revenue grew 24% year over year to $398 million. Net income more than doubled from last year to $25.9 million.

 

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Berkshire to buy insurer Alleghany for $11.6 billion in Warren Buffett’s biggest deal in years

Berkshire to buy insurer Alleghany for $11.6 billion in Warren Buffett’s biggest deal in years
  • Berkshire Hathaway said Monday morning it agreed to buy insurance company Alleghany for $11.6 billion, or $848.02 per share, in cash.
  • The conglomerate said the deal “represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021,” as well as a 16% premium to Alleghany’s average stock price in the past 30 days.

 

Warren Buffett just announced his biggest deal since 2016.

Berkshire Hathaway said Monday morning it agreed to buy insurance company Alleghany for $11.6 billion, or $848.02 per share, in cash. The Omaha, Nebraska-based conglomerate said the deal “represents a multiple of 1.26 times Alleghany’s book value at December 31, 2021,” as well as a 16% premium to Alleghany’s average stock price in the past 30 days. The deal is expected to close in the fourth quarter of this year.

This transaction would mark Berkshire’s biggest acquisition in six years when the conglomerate bought industrial company Precision Castparts for $37 billion, including debt.

Through its subsidiaries, New York-based Alleghany is involved in a number of different insurance businesses, including wholesale specialty, property and casualty, and reinsurance.

“Berkshire will be the perfect permanent home for Alleghany, a company that I have closely observed for 60 years,” Buffett, Berkshire’s chairman and CEO, said in a statement.

Insurance is one of Berkshire’s bread-and-butter businesses as it already owns Geico auto insurance, General Re reinsurance and others that have been driving growth in recent years.

Alleghany CEO Joseph Brandon — who previously led General Re — hailed the deal as a “terrific transaction for Alleghany’s owners, businesses, customers, and employees,” noting that “the value of this transaction reflects the quality of our franchises and is the product of the hard work, persistence, and determination of the Alleghany team over decades.”

Alleghany and its units will operate independently after the deal closes.

The deal may surprise some Berkshire shareholders, as Buffett and his right-hand man — Vice Chairman Charlie Munger — have expressed frustration in their search for a big acquisition. In his 2022 annual letter to shareholders, Buffett said he and Munger found little that “excites” them in terms of large deals.

“Throughout 85 years the Kirby family has created a business that has many similarities to Berkshire Hathaway,” Buffett said. Jefferson W. Kirby is chair of the Alleghany board of directors.

Alleghany started out in 1929 as a holding company for railroads and eventually pivoted to insurance, which has parallels to Berkshire’s roots as a textile manufacturing company more than a century ago before it became a multifaceted conglomerate.

To be sure, $11.6 billion is a small number when compared with Berkshire’s massive cash hoard of $146.72 billion at the end of 2021.

“For Berkshire, the transaction increases its presence in the specialty insurance and reinsurance segments at a time when market conditions remain attractive for growth,” said Cathy Seifert, a Berkshire analyst at CFRA Research.

Shares of Alleghany jumped 25% on Monday. Berkshire’s Class A shares rose about 2% to hit an all-time high after closing above $500,000 for the first time last week.

Alleghany is being advised by Goldman Sachs and Willkie Farr & Gallagher through the transaction’s completion.

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Baker Hughes joins oil rivals in pausing Russian operations

Baker Hughes joins oil rivals in pausing Russian operations

The steps from the Houston, Texas-based businesses come as they respond to U.S. sanctions over Russia’s invasion of Ukraine

U.S. oil field services company Baker Hughes said Saturday that it was suspending new investments for its Russia operations, a day after similar moves were announced by rivals Halliburton Co. and Schlumberger.

The steps from the Houston, Texas-based businesses come as they respond to U.S. sanctions over Russia’s invasion of Ukraine.

In its statement, Baker Hughes, which also has headquarters in London, said the company is complying with applicable laws and sanctions as it fulfills current contractual obligations. It said the announcement follows an internal decision made with its board and shared with its top leadership team.

“The crisis in Ukraine is of grave concern, and we strongly support a diplomatic solution,” said Lorenzo Simonelli, chairman and CEO of Baker Hughes.

Halliburton announced Friday that it suspended future business in Russia. Halliburton said it halted all shipments of specific sanctioned parts and products to Russia several weeks ago and that it will prioritize safety and reliability as it winds down its remaining operations in the country.

Schlumberger said that it had suspended investment and technology deployment to its Russia operations

“Safety and security are at the core of who we are as a company, and we urge a cessation of the conflict and a restoration of safety and security in the region,” Schlumberger CEO Olivier Le Peuch said in a statement.

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A lawsuit accuses Google of systemic racial bias against Black employees, alleging that it pays them less and denies them opportunities

A lawsuit accuses Google of systemic racial bias against Black employees, alleging that it pays them less and denies them opportunities
  • Google has been accused of systemic bias against Black employees in a lawsuit filed on Friday.
  • The plaintiff alleged the company steers them to lower-level jobs and pays them less.
  • The complaint was filed in federal court in San Jose, California.
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Stock futures fall as S&P 500 tries to notch best week since November 2020

Stock futures fall as S&P 500 tries to notch best week since November 2020

Stock futures fell Friday following a three-day rally for the S&P 500 that put the equity benchmark on pace for its biggest weekly gain in more than a year.

Futures on the Dow Jones Industrial Average fell 215 points. S&P 500 futures were down 0.7% along with Nasdaq 100 futures.

Shares of FedEx fell more than 3% in premarket trading after the U.S. delivery firm posted a lower-than-expected quarterly profit amid labor shortages, while the pandemic also hurt its holiday revenue growth.

GameStop saw its shares dropping about 7% in extended trading after the video game retailer reported an unexpected loss during the holiday quarter. The company said it will launch a new marketplace for non-fungible tokens, or NFTs, by the end of April.

Friday’s moves come as traders digest the latest developments in the Ukraine-Russia war.

Several missiles hit an aircraft repair center on the outskirts Lviv in western Ukraine. Meanwhile, President Joe Biden is slated to speak with Chinese President Xi Jinping to discuss the conflict. A Ukrainian official also said one person was killed in an airstrike that hit Kyiv. (Click here for live updates.)

Stocks have enjoyed a relief rally this week as the Federal Reserve’s decision to tighten policy largely met investor expectations. The S&P 500 has gained for three consecutive days this week, up 4.9%, on track for its best week since November 2020.

The blue-chip Dow is coming off a four-day winning streak, rising 4.7% for the week so far, and is also on pace for its biggest weekly gain since November 2020. The tech-heavy Nasdaq Composite is up 6% this week, headed for its best week since February 2021.

Earlier this week, the central bank hiked its benchmark interest rate for the first time since 2018 and signaled six more hikes this year.

“Fortunately, investor expectations for inflation over the next five years was brought down quite a bit, which, if sustained, will continue [to] be helpful for the Fed and the markets despite somewhat higher interest rates,” said John Vail, chief global strategist at Nikko Asset Management.

 

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