US Markets
Wednesday, May 22nd, 2024 3:19 pm EDT
Key Points
- Vivek Ramaswamy has acquired an 8% stake in BuzzFeed and aims to influence the company’s strategy, potentially including an acquisition by a third party.
- BuzzFeed’s stock surged by 55% initially but settled at a 20% increase after the announcement, reflecting market reaction to Ramaswamy’s involvement.
- Ramaswamy, known for his opposition to “woke” politics and ESG principles, raises questions about BuzzFeed’s future direction amidst its financial struggles and changing news consumption habits.
Former GOP presidential hopeful Vivek Ramaswamy has acquired an 8% stake in BuzzFeed and aims to influence the media firm’s strategy, as detailed in a recent regulatory filing. Ramaswamy, a wealthy conservative and founder of Strive Asset Management, plans to engage in discussions with BuzzFeed’s management about all aspects of the company’s operations, including a potential acquisition by a third party. Following this announcement, BuzzFeed shares surged, opening up 55% before settling at a 20% increase by mid-morning, closing at $2.50.
BuzzFeed, which went public through a de-SPAC process in 2021, has seen its stock plummet by 94% since its debut. CEO Jonah Peretti has previously stated that his goal is to position the company for a better future amidst its struggles. BuzzFeed has been significantly impacted by shifting news consumption habits and changes in social media and search traffic, which were crucial to driving visitors to its platforms. The company faced further setbacks in 2023 when it shuttered its Pulitzer Prize-winning news division and laid off 15% of its staff.
Ramaswamy’s involvement with BuzzFeed signals a potential change in the company’s direction. Through Strive Asset Management, he has been vocal about urging companies to avoid “woke” politics and not to adopt environmental, social, and governance (ESG) principles, advocating instead for a focus on long-term business success without political or social agendas. His views are detailed in his book “Woke, Inc.,” where he criticizes the social justice movement of 2020 and 2021 as a “scam.”
Ramaswamy’s business ventures include founding the drug development firm Roivant Sciences, through which he amassed his fortune. Despite his political aspirations and close ties to former President Donald Trump, it is unlikely that Ramaswamy will be selected as Trump’s vice-presidential candidate, given the opposition from several GOP operatives and donors.
Ramaswamy’s potential influence on BuzzFeed and its future strategies will be closely watched, especially given his known stance against incorporating political and social agendas into business operations. This move comes at a critical time for BuzzFeed as it navigates its way through financial difficulties and attempts to redefine its place in the evolving media landscape.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/22/vivek-ramaswamy-buzzfeed-activist-stake.html
