Jonah Peretti, Founder and CEO of Buzzfeed, speaks at the Wall Street Journal Digital Conference in Laguna Beach, California, the United States, on October 18, 2017.

Lucy Nicholson | Reuters

This should be the summer of digital media.

Amid a boom in Special Purpose Acquisition (SPAC) firms, companies like Buzzfeed, Vice, Vox, Bustle, and others have targeted this summer as the likely schedule for going public.

Five months into the year, executives and consultants now believe this will not happen.

According to four people familiar with the matter, a sharp slowdown in SPAC issuance due to new accounting guidelines from the Securities and Exchange Commission has forced many digital media companies to rethink their IPO schedule.

Buzzfeed is expected to find a SPAC partner later this year, said three of the people who asked not to be named because the discussions are private. But other companies like Vice and Bustle, who thought there might be a way to go public on their own in the coming months, have pulled back, people said. Vice was in advanced talks to partner with 7GC & Co Holdings, The Information reported in March, but those talks have stalled, according to people familiar with the matter.

The spokesmen for Buzzfeed and Vice declined to comment.

SPAC slowdown

A SPAC raises capital in an IPO as a so-called blank check company without target acquisition. Investors then use the money to take a private company public, with additional funding provided by institutional investors known as PIPE – Private Investment in Public Equity.

Earlier this year, with so many SPACs launched, digital media companies seemed certain of finding a Shell company with the extra equity that would come with it. Given the SPAC’s dramatic slowdown over the past month, PIPE investors, which include institutional investors like Fidelity, Blackrock, and T. Rowe Price, are becoming increasingly picky about which SPACs to invest in.

This increase in quality has dampened expectations for digital media companies hoping to take advantage of the SPAC wave to add liquidity to long-term shareholders.

Buzzfeed may be the only major digital media company to go public this year, three of the respondents said. Jonah Peretti has no interest in selling Buzzfeed or giving up his CEO role. That’s why he’s looking for goals with founders or executives willing to work together while relinquishing operational control, two respondents said.

Group Nine has formed a SPAC that will bring the digital media company, which owns properties like PopSugar, The Dodo, and NowThis, together with a destination of its choosing. Buzzfeed may make sense as a target for the Group Nine SPAC – especially since Group Nine CEO Ben Lerer has told investors he may be ready to step down as chief executive, as CNBC reported earlier this year – but it stands no deal before that people said. Buzzfeed has had discussions with 890 5th Avenue Partners Inc., another SPAC, Bloomberg reported in March.

There are few, if any, companies like Buzzfeed that act publicly. It’s unclear if there will be strong PIPE interest in digital media companies that have only recently become profitable and whose forecast growth rates cannot compete with industries like electric vehicles and biotechnology, which have sponsored multiple SPACs.

Vice slowed its process of going public after PIPE candidates turned down its finances, one respondent said. Vice’s revenue was $ 580 million last year, up from $ 604 million in 2019, according to The Information.

Still, digital media can find a way forward through SPAC if investors view their development as safer and more stable bets than more imaginative, higher growth companies.

Bustle, which owns sites for women like Elite Daily, Nylon, and Romper, has spoken to several SPACs but currently has no plans to go public on their own, said a person familiar with the matter.

Buyers become sellers

Several digital media companies want Buzzfeed to go public first so they can see how investors value it before deciding whether to go public or sell themselves, two respondents said.

However, those same companies may also face a harsh reality – that they are simply too small and have nondescript growth profiles that public market investors do not care about.

As a result, some companies will be increasingly desperate to sell to either Buzzfeed or Group NAC’s SPAC if they are the only buyers with publicly traded currency, two of those familiar with the matter said. Digital media companies could also team up with other peers like theSkimm news curation service. However, private mergers are often difficult to conduct as there is no public market on which stock valuation can be precisely dictated.

It is possible for other older media companies to choose one or two digital media companies. The Athletic hopes to sell to the New York Times, the Wall Street Journal reported this week

However, the Journal also reported that The Athletic’s first plan – to merge with digital media company Axios and find a SPAC to bring it to the public – has failed.

This is a symbol for the current state of digital media. The euphoria of January and February has given way to a sober May. Venture investors and early employees who had to wait years to get out just have to keep waiting.

WATCH: SPACs are here to stay long term, says Post Capital CEO.