The stock of BuzzFeed, a struggling media company, saw a significant increase after former Republican presidential candidate Vivek Ramasamy disclosed that he has acquired a 7.7% stake in the company as an activist investor. The stock rose by 20% on Wednesday following the news, with a peak increase of 82% during the day. Ramaswamy hinted at potential changes, stating “Stay tuned” through his spokesperson Tricia McLaughlin. BuzzFeed did not immediately respond to requests for comment. Ramaswamy believes that the company’s securities are undervalued and sees an opportunity for investment, seeking a shift in the company’s strategy.
Despite the recent surge in stock value, BuzzFeed’s shares have plummeted by 92% since its initial public offering in 2021, remaining above its lowest closing price of 67 cents per share. The company, like many other digital publishers, has faced challenges due to a declining advertising market, decreasing social media referral traffic, and advancements in artificial intelligence technology. In an effort to improve profitability and reduce costs, BuzzFeed sold Complex Networks for $108.6 million after purchasing it for $300 million three years ago. The company’s portfolio includes brands such as HuffPost, Tasty, and the First We Feast brand, known for its “Hot Ones” YouTube series.
Last year, BuzzFeed made significant changes, including the closure of its Pulitzer Prize-winning digital news site, as part of a larger initiative to reduce the company’s workforce by 15%. The media company has been working to streamline operations and focus on profitability in the face of ongoing challenges. With Ramaswamy’s involvement and his discerned undervaluation of the company, there may be further changes in the strategy and direction of BuzzFeed in the coming months. The activation of an activist investor could potentially bring about a new chapter for BuzzFeed as it aims to navigate the evolving media landscape amidst industry-wide challenges.
