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BuzzFeed Shares Soar After Vivek Ramaswamy Takes Activist Stake
BuzzFeed (BZFD) shares rose as much as 83% in early trading Wednesday after former Republican presidential candidate Vivek Ramaswamy disclosed a share of 7.7% at the embattled media giant and has indicated he will push for changes at the company.
According to an SEC filing, Ramaswamy believes BuzzFeed shares “are undervalued and represent an attractive investment opportunity.” He intends to engage the board in discussion about “numerous operational and strategic opportunities to maximize shareholder value, including a change in the company’s strategy.”
BuzzFeed, once seen as the crown jewel in the digital media space, has struggled after going public through a special purpose acquisition company, or SPAC, in 2021. Shares have fallen more than 90% since then.
The disclosure of the stake raises more questions about BuzzFeed’s strategic direction. Ramaswamy, a 38-year-old biotechnology entrepreneur, supported Donald Trump after abandoning of the presidential race in January, following the Iowa caucus. He built a reputation as a “anti-woke” activist opposes corporate involvement in social and environmental causes.
FILE – Vivek Ramaswamy speaks during the Conservative Political Action Conference, CPAC 2024, at National Harbor in Oxon Hill, Maryland, Saturday, February 24, 2024. Ramaswamy purchased a 7.7% stake in Buzzfeed, the award-winning digital media Pulitzer Prize outlet that went into restructuring last year. Shares soared more than 50% before the market opened on Wednesday, May 22. (AP Photo/Alex Brandon, File) (ASSOCIATED PRESS)
Over the past year, the company has undergone major changes in an attempt to achieve profitability.
BuzzFeed announced plans to close its news division and cut 15% of its headcount, or about 180 employees, in April 2023. Earlier this year, the company said it would cut an additional 16% of its workforce “to reduce centralized costs and allow the company to become more agile, sustainable and profitable.”
Along with the layoffs, BuzzFeed also sold digital media company Complex Networks which it acquired in 2021 for around US$300 millionfor live video shopping platform NTWRK in a $108.6 million all-cash deal. BuzzFeed received approximately $5.7 million in severance and office-related charges 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 to be in the range of a $4 million loss to a $1 million profit in the current quarter, “roughly flat year after year at the midpoint.”
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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