BuzzFeed shares surge following Vivek Ramaswamy's acquisition of activist stake

BuzzFeed's stock is on the rise following news that Vivek Ramasamy, a former Republican presidential candidate, has acquired a stake in the struggling media company to help change its direction.

Shares of BuzzFeed jumped over 25% on Wednesday after it was disclosed in a securities filing that Ramaswamy now owns 7.7% of the company. At its peak, the stock surged more than 82%.

“Stay tuned,” Ramaswamy told CNN through spokesperson Tricia McLaughlin.

BuzzFeed did not immediately respond to CNN’s request for comment.

Ramaswamy thinks that the Issuer's securities are undervalued and offer a good investment opportunity, according to the filing. He also wants to see a change in the Company's strategy, as mentioned in the filing.

A person walks past BuzzFeed offices in the Hollywood neighborhood on April 20, 2023 in Los Angeles, California. BuzzFeed News, which won a Pulitzer Prize in 2021 for reporting on the mass detention of Muslims in China, is shutting down as its parent company, Buzzfeed Inc., cuts costs.

LOS ANGELES, CALIFORNIA - APRIL 20: A person walks past BuzzFeed offices in the Hollywood neighborhood on April 20, 2023 in Los Angeles, California. BuzzFeed News, which won a Pulitzer Prize in 2021 for reporting on the mass detention of Muslims in China, is shutting down as its parent company, Buzzfeed Inc., cuts costs. (Photo by Mario Tama/Getty Images)

Mario Tama/Getty Images

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The digital media revolution is coming to an end with Vice and BuzzFeed facing significant challenges. BuzzFeed's shares have dropped by approximately 92% since its IPO in 2021, but they are still higher than the all-time low of 67 cents per share.

BuzzFeed, like many other digital publishers, has faced challenges in the recent years. These challenges include a decrease in advertising revenue, a decline in social media traffic, and the emergence of artificial intelligence.

In February, the company made a strategic decision to sell Complex Networks for $108.6 million. This move was part of an effort to reduce costs and enhance profitability. Just three years ago, BuzzFeed had acquired Complex Networks for $300 million. Some of the popular brands under BuzzFeed's portfolio are HuffPost, Tasty, and the First We Feast brand, which is known for its “Hot Ones” YouTube series.

Last year, BuzzFeed shuttered its Pulitzer Prize-winning digital news site as part of a broader move to slash the company’s headcount by 15%.

Editor's P/S:

The acquisition of a significant stake in BuzzFeed by Vivek Ramasamy has sparked a surge in its stock value, signaling a potential turnaround for the struggling media company. Ramaswamy, a former Republican presidential candidate, has expressed his belief in the undervaluation of BuzzFeed's securities and has hinted at his intention to influence the company's strategic direction.

This investment comes amidst ongoing challenges for BuzzFeed, which has faced declining advertising revenue, reduced social media traffic, and competition from emerging artificial intelligence technologies. Despite these hurdles, the company's portfolio includes popular brands such as HuffPost, Tasty, and First We Feast, suggesting potential for growth and diversification. Ramaswamy's involvement may provide a fresh perspective and drive the implementation of innovative strategies to address the company's challenges and capitalize on its strengths.