By practically every measure, investors should consider abandoning ship on internet media firm BuzzFeed (BZFD). On Thursday, management announced that it will lay off 15% of its staff, amounting to about 180 people. Even worse, the company will get rid of BuzzFeed News, its journalistic arm. Unsurprisingly, BZFD stock fell sharply on the disclosure. As well, it attracted options trading dynamics featuring bearish implications.
Undeniably, BZFD stock represents an extremely speculative market idea. Trading hands in literal penny stock territory, it’s not a venture to enter into if you don’t understand the risk-reward profile. At the same time, for contrarian speculators willing to read between the lines, BuzzFeed could be an interesting wager. Essentially, the layoffs allow the struggling enterprise to rid itself of inefficient or unviable businesses.
