Last month, former 2024 presidential candidate Vivek Ramaswamy disclosed a 7.7% stake in Buzzfeed (NASDAQ:BZFD) stock, equivalent to 2.72 million shares.
At the time, Ramaswamy stated that he believed BZFD stock was undervalued and that he wanted to engage in communications with the company’s board and executives in order to maximize shareholder value.
On May 26, Ramaswamy penned a letter to Buzzfeed’s board revealing that he had increased his stake to 8.37%, cementing him as the second-largest Class A shareholder. The letter also noted that Buzzfeed has a “nonzero” chance of becoming bankrupt in December 2024, as that is when the company’s noteholders “can force repayment of your outstanding convertible debt.”
According to a new regulatory filing, Ramaswamy’s stake in the quirky media company has risen to 8.9% or 3.12 million shares. He increased his stake between June 6 and June 20 at prices ranging between $2.00 and $2.61.
BZFD Stock: Vivek Ramaswamy Increases Stake to 8.9%
“The Reporting Person has had, and intends to continue to have, discussions with management and the Board regarding the matters set forth in the May 26th letter, including discussions with certain of, and regarding, three potential new board members, Chris Balfe, Patrick Bet-David, and Clay Travis,” read the filing. Ramaswamy seeks to elect the three individuals by July 15.
Ramaswamy has big plans for Buzzfeed, which has struggled in recent years. Since 2022, BZFD has shed over 85%. Last year, revenue fell by 26% year-over-year and is expected to fall by a double-digit percentage this year, according to Ramaswamy. The company is also unprofitable, with over $100 million in debt.
Ramaswamy believes that a restructuring, focusing on creator-led audio and video content and redefining Buzzfeed’s brand, will maximize shareholder value. The restructuring would likely include a significant reduction in headcount.
He also wants to expand Buzzfeed’s reach by capitalizing on creator-led content across the political spectrum, suggesting an uncapped revenue model based on engagement. This could help the company regain a “distinctive purpose for existence,” revitalizing the brand in the process.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
