Many people believe that penny stocks are those that trade below $1. That is not the official definition. The threshold is widely defined as below $5. BuzzFeed’s stock recently closed at $1.66, down from a year’s high of $14.77.
[in-text-ad]
If the upcoming recession is like those in years past, media companies will be particularly hard hit by falling ad demand. In the most recently reported quarter, BuzzFeed’s revenue was $92 million. Of that, $49 million was adverting. If history is any indication, the pace at which that figure has grown will drop off, and the figure may even fall year over year.
The most obvious problem BuzzFeed faces is that, in a declining market, companies that lose money usually take an above-average beating. BuzzFeed lost $45 million in the most recently reported quarter. In the quarter a year ago, the comparable number was $11 million. This is old news, but it does show BuzzFeed faces a struggle if ad demand slackens in a difficult economy.
There is an argument to be made that the 50% or so drop in BuzzFeed’s stock over the past month is part of a much wider reaction in the market. As the market collapses overall, some promising companies are pulled down, even if they do not deserve to be part of the sell-off.
As a recession starts, management has a chance to prove it can keep revenue rising at a brisk pace. Otherwise, recovery in the share price will be extremely difficult.
100 Million Americans Are Missing This Crucial Retirement Tool
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
