BuzzFeed (BZFD) shares rose in early trading on Wednesday after former Republican presidential candidate Vivek Ramaswamy revealed a 7.7% stake in the struggling media giant and expressed his intention to drive change at the company. It soared by up to 83%.
Ramaswamy believes BuzzFeed stock is “undervalued and represents an attractive investment opportunity,” according to an SEC filing. He will discuss with the board “a number of operational and strategic opportunities to maximize shareholder value, including a shift in company strategy.”
Once considered the crown jewel of digital media, BuzzFeed has struggled after going public through a special acquisition company (SPAC) in 2021. The stock price has fallen more than 90% since then.
The public offering raises further questions about BuzzFeed’s strategic direction. Ramaswamy, a 38-year-old biotech entrepreneur, endorsed Donald Trump after dropping out of the presidential race after the Iowa caucuses in January. He has developed a reputation as an “anti-woke” activist who opposes corporate involvement in social and environmental issues.
Over the past year, BuzzFeed has undergone significant changes to achieve profitability.
BuzzFeed announced plans to close its news department in April 2023 and cut 15% of its workforce, or about 180 people. The company announced earlier this year that it would be cutting an additional 16% of its workforce to reduce centralization costs and streamline operations. Businesses will become more agile, sustainable and profitable. ”
In addition to the layoffs, BuzzFeed sold Complex Networks, the digital media company it acquired in 2021 for about $300 million, to live video shopping platform NTWRK in an all-cash deal worth $108.6 million. In addition to the purchase price, BuzzFeed received approximately $5.7 million in severance and office-related expenses.
The company last week reported a first-quarter adjusted EBITDA loss of $11.3 million, but expects this quarter’s adjusted EBITDA to be a loss of $4 million to a profit of $1 million. “It’s almost flat compared to the same period.” At the halfway point. ”
