Vivek Ramaswamy Invests in Struggling BuzzFeed, Inc.

Vivek Ramaswamy, the former Republican presidential candidate, entrepreneur, and vocal supporter of Donald Trump, has made a surprising move by acquiring a 7.7% stake in BuzzFeed Inc. BuzzFeed, famous for its online quizzes and pop culture content, has been grappling with financial difficulties, including the closure of its news division nearly a year ago. Between March 14 and May 21, Ramaswamy bought 2,723,927 shares in the company, and this news caused BuzzFeed’s shares to surge by more than 50% in premarket trading on May 22.

In his filing with the Securities and Exchange Commission (SEC) on May 21, Ramaswamy explained that he sees BuzzFeed’s stock as undervalued and a promising investment. He plans to talk with BuzzFeed’s board and management about various ways to improve the company and boost its value for shareholders, which might include changing its current strategy.

BuzzFeed went public in 2021 but has struggled to keep its revenue up in a tough digital advertising market. Late in 2022, the company started cutting jobs, and this led to the closure of its Pulitzer Prize-winning news division last year.

Ramaswamy’s investment, worth around $6.81 million based on the share price from the previous Tuesday, makes him BuzzFeed’s fourth-largest shareholder, following Comcast Corp, NEA Management Co, and Hearst Communications Inc. This move is his latest venture after he left the 2024 presidential race and endorsed Donald Trump, following a fourth-place finish in the Iowa caucuses.

At 38, Ramaswamy has an impressive entrepreneurial background. He founded the pharmaceutical company Roivant Sciences Ltd in 2014 and co-founded Strive Asset Management in 2022. Though he left Strive to focus on his presidential campaign, he has made it clear that he won’t be returning to the firm.

As of Wednesday afternoon, BuzzFeed’s market capitalization was about $115 million, a sharp drop from its over $1 billion valuation when it went public in 2021.

An interesting twist in this story is the unusually high trading volume of BuzzFeed shares. By 11:30 a.m. on May 22, about 58.5 million shares had been traded, far above the average of 498,736 and even more than much larger companies like Nvidia and Tesla. This spike could hint at meme trading or other unusual stock market activities.

BuzzFeed’s financial woes have been ongoing since it went public. In its latest earnings report, the company revealed an 18% drop in first-quarter revenue compared to the previous year. Advertising revenue was down by 22%, content revenue by 19%, and other revenues also dropped by 19%. Last April, BuzzFeed announced the closure of its Pulitzer Prize-winning news division, citing the difficulties of sustaining a news business tailored for social media.

Ramaswamy is now considered a leading contender for Donald Trump’s vice presidential pick after he ended his own campaign in January. Listed as an entrepreneur in the SEC filing, Ramaswamy has been a significant player in biotech and drug development. He grew his fortune through his role at Roivant Sciences, which went public in 2021, and founded an “anti-woke” index fund provider.