The Washington Post’s Molly Hensley-Clancy wrote that the company had “made it virtually impossible for former employees to trade their shares on the first day.” If you got a headache reading all that, imagine how the former employees feel! By then, the anger had already reached Twitter, where it has remained since then. We will keep you updated if we receive any additional information from Continental.” “In the past 24 hours we have had many conversations with Continental and they’ve assured us they are completing this process as quickly as possible. “We understand and sympathize with your frustration with this process,” the email continued. We wish this information had been provided in Continental’s initial Letters of Transmittal (in addition to the necessary paperwork for you to complete).” The email, first reported by Insider, was titled “Equity Update: Class B Shares” and informed people with Class B shares that the company had only just learned that “holders of Class B shares would have to take additional steps to convert their shares to Class A, before they could be transferred for sale, and that Continental’s conversion process could take multiple days. Others through an email from BuzzFeed on Tuesday evening, which Motherboard reviewed. Some reportedly found out Monday night through Continental. That same week, the Wall Street Journal reported that SPAC investors reportedly pulled out 94 percent of the $287.5 million they had handed to the shell company after finding out the terms of the deal with BuzzFeed.)īy the time the former employees found out about the extra step, the stock had already dropped. The email had two issues: It added, just days before trading started, that one step (the transfer of stock) would take “3-5 business days.” More critically, it didn’t include a necessary instruction for holders of Class B shares to convert to Class A. Then, last Wednesday, BuzzFeed wrote the steps down in an email obtained by Motherboard.
The next day, Continental requested documentation from employees. The timeline is convoluted, but Axios did a good job summarizing it on Friday morning, reporting that the Tuesday before Thanksgiving, BuzzFeed sent an email saying “you don’t have to do anything” except wait for instruction. Peretti wrote in Slacks this week that the company’s “tight timeline before going public” also led it to “freeze the ability to exercise options” in order to “get a final share count” and “get shares transferred.” In June, BuzzFeed announced its plans to go public through a merger with a special merger acquisition company, or SPAC, a decision that initially led to squabbling between the company and its largest investor, NBCUniversal, which didn’t like the idea as proposed. The process has been a bit of a mess almost from the jump. In the Slack messages, Peretti denied "speculation" that "big investors" were able to "trade ahead of employees," saying they were "locked up and not able to trade." These include executives and associated venture capitalists, who are unable to sell for half a year. The spokesperson strongly denied it had anything to do with this whole disaster, and noted that executives can’t trade for at least a half a year. Another group is in here too though: Some people who were fired and settled, according to the same person.īuzzFeed converted Peretti and other executives’ Class B shares to Class A last week, according to SEC filings, but a company spokesperson said that was a legally required part of the SPAC transaction that gave BuzzFeed executives control of the public company. It also includes the family of the late Michael Hastings. This includes some who left on good terms and were offered an extension for one of any number of reasons, according to a person familiar with the company. Notably, the company has in the past extended the exercising timeline for the options of certain former employees as well. (“ class B gang rise up,” BuzzFeed reporter Rosie Gray, who left the company for the Atlantic for a few intervening years, tweeted Wednesday.)Ĭurrent employees who did not have to exercise options have had an easier time. These people have what are known as Class B shares-handed out earlier in the company’s history, according to Peretti’s Slacks-and they have come to hold a frustrated but justifiable solidarity with one another. The crux of the issue is this: At least some former employees who believed in the future of the company enough to exercise their options have found themselves unable to sell, through no clear fault of their own. “We expected the transfer agent to facilitate these conversions very quickly and are very upset with them and pushing them hard to fix the problem,” he added a few minutes later.
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