The New York Times Covers Firm’s Arbitration Filing Against BuzzFeed Over IPO Shares Dispute

March 16, 2022

News outlets across the country are reporting on the arbitration Harris St. Laurent & Wechsler LLP just brought on behalf of 44 former employees of BuzzFeed (NASDAQ: BZFD). The former employees, almost all of whom were in sales and creative, were improperly locked out of BuzzFeed’s December 6, 2021 IPO and were denied the chance to sell their BuzzFeed stock before the share price suffered a dramatic—and predictable—decline. The demand seeks $4.6 million in compensatory damages.

The New York Times broke the story on March 15, 2022. As the demand for arbitration explains, BuzzFeed, an online multimedia company, debuted on the Nasdaq Stock Market on Dec. 6 after it merged with a publicly-traded special purpose acquisition company (SPAC). The claimants, who held 400,000 cumulative shares of BuzzFeed stock, received misleading and incomplete instructions on how to convert their shares in “old” BuzzFeed into “new” BuzzFeed shares that could be traded on the market. As a result, they could not sell their shares until at least several days after BuzzFeed’s IPO, by which point they had lost 60% of their opening-day value. Many of the employees still cannot sell their shares to this day. 

The demand puts it plainly: “Claimants . . . were failed by every party charged with looking out for their best interests.” In addition to BuzzFeed itself, the filing also names as parties BuzzFeed founder Jonah Peretti, Continental Stock Transfer and Adam Rothstein, the executive chairman of the shell company that merged with BuzzFeed.

Partners Yonaton Aronoff and Joseph Gallagher handled the filing. 

Other media outlets covering the filing include Axios and Yahoo.