Former Republican presidential candidate Vivek Ramaswamy announced Tuesday he is increasing his stake in the digital media company, BuzzFeed.
The entrepreneur and ally of former President Donald Trump also called for staff cuts and new board members for the popular but struggling youth-oriented website.
“Nearly every legacy media company has failed its audience,” Ramaswamy wrote in a post on X. “The first one to openly admit it and make major changes should soar.”
Noting that he is now the second largest shareholder in the 18-year-old company, he said “shakeup is required.”
In a letter to the company’s board of directors that accompanied his X post, Ramaswamy said BuzzFeed has lost its way since going public in December 2021 with a valuation of $1.5 billion. He said the share price had lost 94% of its initial listing when he started buying shares in the company in January. He now holds an 8.37% stake and will continue increase his position, he said.
Ramaswamy first announced he had taken an activist stake in BuzzFeed last week.
“I own your stock because I believe BuzzFeed can still become a more valuable company than at its initial listing, but this requires a major shift in strategy,” he wrote in his letter to the board.
Saying “the worst is yet to come” for the company, Ramaswamy said searches are making up a growing percentage of traffic to the site. With AI chatbots now answering questions that had previously directed users to websites through social media, he said BuzzFeed’s advertising and commerce revenue will both be negatively affected “as people searching for products will never leave Google’s search page, which stops BuzzFeed from earning affiliate or other product revenue.”
He said there is no chance BuzzFeed escapes bankruptcy before December without making changes. He suggested the company conduct a “ground-up restructuring to right-size itself” to prepare for the increased use of artificial intelligence. Such a restructuring “will almost certainly require large-scale headcount reductions, dumping your legacy digitized print business model and divesting assets to repay debt.”
Last May, BuzzFeed laid off 15% of its staff and shuttered its 12-year-old news division.
He also suggested the company focus on creator-driven audio and video content to leverage its 60 million YouTube subscribers and 280 million social media followers, and said the company should redefine its brand “around the pursuit of truth.” Ramaswamy’s tagline on X is “stand for truth.”
In addition, he proposed BuzzFeed diversify its board of directors with three individuals he did not name but described as “high profile,” “with strong track business records in new media.”
“I’m glad you think BuzzFeed is undervalued. I totally agree,” BuzzFeed CEO Jonah Peretti said in a letter to Ramaswamy responding to his suggestions.
Peretti said he welcomed outside perspectives from shareholders and was open to hearing more from Ramaswamy, but added, “You have some fundamental misunderstandings about the drivers of our business, the values of our audience and the mission of the company,” he said. “I’m very skeptical it makes business sense to turn BuzzFeed into a creator platform for inflammatory political pundits. And we’re definitely not going to issue an apology for our Pulitzer Prize-winning journalism.”
Ramaswamy, who authored the book “Woke, Inc.: Inside Corporate America’s Social Justice Scam” and campaigned against corporate diversity, equity and inclusion agendas, called out BuzzFeed for being focused on leadership that looked like the rest of America rather than “thinking like the rest of America.”
Ramaswamy touted his own success as a businessman who created “fast-growing startups in three different industries, the largest of which is a ~$9 billion NASDAQ-listed company that has returned additionally over $1.5 billion in cash to shareholders in its first 10 years of existence.”
A graduate of Harvard College and Yale Law School, Ramaswamy was the youngest GOP candidate for president. Campaigning as a MAGA candidate and the only Millennial in the race, the 38-year-old dropped out of the contest in January after winning 8% of the Iowa caucuses.