Former Republican presidential candidate and biotech entrepreneur Vivek Ramaswamy has made a bold move by purchasing a minority stake in Buzzfeed, the digital publishing company that faced significant challenges in recent years.
Ramaswamy’s acquisition of a 7.7% stake in Buzzfeed sent the company’s shares soaring by more than 50% before the market opened on Wednesday. In a filing with the Securities and Exchange Commission, Ramaswamy expressed his belief that Buzzfeed’s stock is undervalued and indicated his intention to engage with the company’s board and management.
Buzzfeed has been struggling to boost its sales since going public in 2021. The company faced a series of setbacks, including job cuts and the closure of its Pulitzer Prize-winning digital media outlet, BuzzFeed News. CEO Jonah Peretti announced layoffs across various departments, citing a challenging digital advertising environment.
In its most recent financial report, Buzzfeed reported a first-quarter loss of $35.7 million on revenue of $44.8 million. Advertising revenue fell by 22%, while content revenue declined by 19%. The company is projecting a further decline in revenue in the coming months.
Ramaswamy, the son of Indian immigrants, has a background in hedge funds and pharmaceutical research. His entry into politics at a high level comes after amassing significant wealth and achieving academic success at Harvard University and Yale Law School.
With Ramaswamy’s investment, Buzzfeed’s stock rose by 59% to about $4 early Wednesday, signaling a potential turnaround for the struggling digital publishing company.