BuzzFeed shares soar after Vivek Ramaswamy acquires nearly 8% stake
What's the story
BuzzFeed's stock experienced a significant surge following the acquisition of an activist stake by former Republican presidential candidate, Vivek Ramaswamy.
The media company's shares rose approximately 20% on Wednesday.
A US Securities and Exchange Commission filing revealed that Ramaswamy had secured a 7.7% stake in the company, causing the stock to increase by more than 82% at its peak earlier in the day.
Ramaswamy is now the fourth largest shareholder in BuzzFeed, behind Comcast, NEA Management, and Hearst Communications.
Strategy shift
Ramaswamy's move targets BuzzFeed's strategic adjustment
Ramaswamy's acquisition is aimed at adjusting BuzzFeed's strategy, as he believes the company's securities are undervalued and represent an attractive investment opportunity. He also seeks a "shift in the company's strategy."
This information was revealed in the securities filing.
When asked for comment by CNN, Ramaswamy responded through spokesperson Tricia McLaughlin with a cryptic "Stay tuned."
In response to this development, BuzzFeed stated that it is always open to hearing ideas from its shareholders while maintaining its editorial integrity.
Company challenges
BuzzFeed's struggles and strategy amid challenges
BuzzFeed has faced several challenges in recent years, including a softening advertising market, declining social media referral traffic, and the rise of artificial intelligence (AI).
The company's shares have dropped about 92% since its IPO in 2021. Despite these struggles, it remains above its record low closing price of 67 cents per share.
To cut costs and improve profitability, BuzzFeed sold Complex Networks for $108.6 million in February after purchasing it for $300 million, three years earlier.