Shares of BuzzFeed (BZFD) rose as much as 83% in early trading on Wednesday after former Republican presidential candidate Vivek Ramaswamy disclosed a 7.7% stake in the embattled media giant and signaled he would push for changes at the company .
According to an SEC filing, Ramaswamy believes BuzzFeed’s stock is “undervalued and represents an attractive investment opportunity.” He plans to engage the board in discussion of “numerous operational and strategic opportunities to maximize shareholder value, including a shift in the company’s strategy.”
BuzzFeed, once seen as a crown jewel in the digital media space, struggled after going public in 2021 through a special purpose acquisition company, SPAC. The stock has fallen more than 90% since then.
The disclosure of the stake raises more questions about BuzzFeed’s strategic direction. Ramaswamy, a 38-year-old biotech entrepreneur, endorsed Donald Trump after withdrawing from the presidential race in January following the Iowa caucuses. He has built a reputation as an “anti-woke” activist who opposes corporate involvement in social and environmental issues.
Over the past year, BuzzFeed has undergone major changes in an effort to become profitable.
BuzzFeed announced plans to close its news division and cut 15% of its workforce, or about 180 employees, by April 2023. Earlier this year, the company said it would cut another 16% of its workforce “to reduce centralized costs and the business to become more agile, sustainable and profitable.”
In addition to layoffs, BuzzFeed also sold digital media company Complex Networks, which it acquired for about $300 million in 2021, to live video shopping platform NTWRK in a $108.6 million cash deal. BuzzFeed received approximately $5.7 million in severance and office-related costs in addition to the purchase price.
Last week, the company reported an adjusted EBITDA loss of $11.3 million in the first quarter, but said it expects adjusted EBITDA in the current quarter to be in the range of a $4 million loss to $1 million profit, “about the same on an annual basis”. in the middle.”
