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Media Meltdowns

How Dare BuzzFeed Workers Expect Their Compensation To Be Worth Anything

BuzzFeed executive guy Jonah Peretti looking like a real schmuck
Photo by Bennett Raglin/Getty Images for BuzzFeed Inc.

Maybe you have been following the BuzzFeed stock scandal. Alternatively, maybe you are not an absolute sicko. Well, there is a scandal around BuzzFeed’s stock! Your brains are now slightly wormier than they were just a moment ago; there is no going back. Here is a summary of the scandal:

BuzzFeed opened itself for public trading via special-purpose acquisition company (SPAC) back in December, amid plenty of hype and after years of flirting with an initial public offering (IPO). SPACs, in plain terms, are a shady type of deal where business-deals types create a fictional-in-virtually-all-respects corporation, and sell shares of ownership of that corporation, as a proxy for a real-world company that wants to go public without going through the revealing and time-consuming IPO process. In any event, the thing to know about BuzzFeed’s SPAC deal is that after a very brief rise immediately after trading opened, the price of the stock, initially $10 a share, fell sharply, and has pretty much just kept falling ever since. It closed its first day down 11 percent, fell another 40 percent a few weeks ago, and is selling at an appalling $1.68 a share as of this writing—a decline of around 85 percent since its opening.

LOL who cares and/or get fucked, right? Well, not so fast. A group of present and former BuzzFeed employees got screwed real bad in all of this: When the company went public, they found themselves mysteriously walled off from accessing their shares, and thus from selling before those shares lost huge portions of their initial value. Importantly, these were not profiteering investor-class parasites looking to get paid for having money; as New York‘s Jen Wieczner lays out in an article from this morning, many of them were talked into accepting stock options in lieu of salary when they joined BuzzFeed, and had waited years, in some cases, just for an opportunity to turn that theoretical compensation into actual, y’know, compensation.

Wieczner’s reporting uncovers other fucked-up elements of this. BuzzFeed gave the affected employees and ex-employees confusing and/or misleading guidance about what they’d need to do, and no answers to their questions, in the run-up to the SPAC opening; meanwhile other early share- and option-holders appear to have received deluxe hand-holding throughout the process of ensuring they could sell their stock as quickly and as profitably as possible. When the explanations came to those left hanging, they were too late and also highly dubious: BuzzFeed claims it simply didn’t know holders of one class of stock would have to convert it to another in order to sell it—despite BuzzFeed having alerted at least one shareholder to that exact requirement months before the SPAC.

Anyway, here’s an excerpt from Wieczner’s piece, including some quotes from an anonymous former BuzzFeed executive who seems to be a real big dickhead to me:

Some people involved in the listing argue that going public was the best option for the employees. Even if their shares are worth little at the moment, it’s still more than nothing — which was all they had in hand when BuzzFeed was private. “I don’t really see the employees as victims here,” says a former executive. “If you said to me, ‘Would you rather have shares at $4 or have shares that you could not sell maybe ever?,’ I think most people probably would have taken that deal. I don’t think there’s a deep issue of justice at play here. Justice for people who made $50,000 instead of $100,000? Come on.” Besides, the person adds, it’s foolish for anyone to put faith in a SPAC, a Wall Street invention that has birthed its fair share of scams: “You’re the person participating in the heist. Ultimately, you can’t really turn around and complain that your share of the takings wasn’t what you thought it should be.”

New York

This former executive can go to hell! The employees forced to stand by as the value of their shares got nuked to hell did not put faith in a SPAC and were not “participating in the heist,” except in the sense that they certainly appear to be victims of one. For one thing, in many of their cases they likely had never so much as heard of a “SPAC” back when they accepted BuzzFeed stock options as a supplement to crappy salaries, whether as an affirmative bet on BuzzFeed’s future or because they felt they had no better alternative in digital media. For another, for as shady as the whole field of special-purpose acquisition companies has shown itself to be, there’s no indication that this group of powerless BuzzFeed employees and ex-employees set out to rip anybody off. They had no say in whether BuzzFeed would go public via SPAC or IPO or any other financial acronym. They simply had what they had and the intent to do exactly what they’d been told they’d be free to do with it, and then found their hands cuffed at the first and last opportunity to turn it into anything good.

And they didn’t get burned by any of the ordinary foreseeable risks inherent to any of this shit. They’re not complaining about the mere fact that the stock price went down; that is a variety of shit happening that comes with stock, uh, doing or whatever. They got locked out of accessing their shares altogether! They literally couldn’t sell, even in the window when the stock price was going up. That emphatically is not the same thing as stupidly buying or holding onto some dogshit stock or trying to strike unearned riches out of some fly-by-night SPAC investment. That is much more like getting scammed.

Moreover, what the hell were they supposed to do, in this anonymous assbrain’s reckoning? Accepting stock options as a form of compensation involves a tradeoff: giving up the short-term utility of, y’know, pay, in exchange for a chance down the line to hold something worth at least as much as what you might otherwise have taken home in salary, and the liberty to choose when to turn that something into actual money. BuzzFeed offered this arrangement to these people when they joined the company, in at least some cases as an inducement to join in the total absence of any opportunity to negotiate better actual salary. Once they had the stock options, were they supposed to not try to realize that theoretical value when an opportunity presented itself? On what basis? That would be, in effect, turning away payment for their own real work. They’d already deferred that payment for years; they’d already consented to forego that pay indefinitely until BuzzFeed management decided to take the company public in one way or another. They’d already agreed to negotiate that pay with the public, rather than taking it as a direct cut of the proceeds of their labor. And then they literally couldn’t.

Now that they’ve seen their bet on the company’s future undermined, apparently, by that same company—now that they’ve been motherfucked, either by gross negligence or by malice on BuzzFeed’s part, out of nearly all the value of what was supposed to be fair pay for their work—now they’re greedy accomplices in their own swindling, according to this sack-of-crap former executive. Now they’re lousy ingrates, because they’re not overjoyed merely to receive a tiny fraction of what they could have earned for their work, rather than receiving nothing at all. The only thing less surprising than an executive-class creep having these thoughts on the matter is that executive-class creep not having the courage to express those thoughts in the vicinity of their own printed name. Fuck this guy!