BuzzFeed stock soars as Vivek Ramaswamy takes stake

BuzzFeed’s stock is soaring after former Indian American Republican presidential candidate Vivek Ramasamy revealed that he’s taken an activist stake in the beleaguered media company in a bid to adjust the firm’s strategy.

Shares of BuzzFeed gained about 20% on Wednesday after a securities filing revealed that Ramaswamy acquired a 7.7% stake in the company. The stock popped more than 82% earlier in the day at its highs, CNN reported.

“Stay tuned,” Ramaswamy told the news channel through spokesperson Tricia McLaughlin. “BuzzFeed is purposely structured to protect its editorial integrity. We are always open to hearing ideas from our shareholders,” BuzzFeed Inc stated.

READ: Indian American Vivek Ramaswamy raises $1.1 billion for Roivant Sciences (August 11, 2017)

Ramaswamy “believes the securities of the Issuer are undervalued and represent an attractive investment opportunity,” according to the filing stating he also seeks a “shift in the Company’s strategy.”

Shares of BuzzFeed have plummeted roughly 92% since its initial public offering in 2021, though it remains above its record low closing price of 67 cents per share. BuzzFeed has struggled in recent years along with other digital publishers, battered by a softening advertising market, sinking social media referral traffic and the rise of artificial intelligence.

The company in February sold Complex Networks for $108.6 million, after purchasing it for $300 million three years ago, as part of its effort to slash costs while improving the company’s profitability.

Buzz feeds portfolio of brands includes HuffPost, Tasty and the First We Feast brand that houses 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%.

READ: Axovant Sciences founded by Vivek Ramaswamy has biggest US biotech IPO (June 12, 2015)

Meanwhile, Comcast-owned NBCUniversal disposed of more than half of the remaining shares it owns in BuzzFeed, a transaction that netted it $10.15 million, Variety reported.

NBCU’s stock sale came a day after Ramaswamy disclosed that he had acquired a 7.7% stake in BuzzFeed and intended to “engage in a dialogue” with BuzzFeed’s board about “opportunities to maximize shareholder value, including a shift in the company’s strategy.”

NBCU had invested $400 million in BuzzFeed in 2015 and ’16. Before NBCU’s May 22 sale of 3.18 million shares — 61% of its stake — the media conglomerate had held 15% of BuzzFeed’s outstanding shares. NBCU now owns 2 million shares in BuzzFeed, as disclosed in an SEC filing.

In January and February of 2023, NBCU sold $28.3 million worth of BuzzFeed shares. That series of stock sales came after a jump in BuzzFeed’s share price on the company’s new AI strategy and reduced NBCU’s ownership stake from 26.5% to 15%.

After Ramaswamy’s acquisition of 2.7 million shares of BuzzFeed was disclosed, the company’s stock popped as much as 80% during Wednesday’s trading session before closing at $3.01/share, up 20% for the day.

The May 22 sale price of NBCU’s shares was listed at $3.1936, which is a volume-weighted average price for multiple transactions that were executed at prices ranging from $3.00 to $3.90 per share, per the SEC filing as reported by Variety.