Stock market today: Stocks close lower after Fed minutes, ahead of Nvidia earnings

BuzzFeed (BZFD) stock surged as much as 83% in early trading on Wednesday after former Republican presidential candidate Vivek Ramaswamy disclosed a 7.7% stake in the embattled media giant and indicated he would push for changes at the company.

According to an SEC filing, Ramaswamy believes BuzzFeed shares “are undervalued and represent an attractive investment opportunity.” He intends to engage the board in discussion over “numerous operational and strategic opportunities to maximize shareholder value, including a shift in the company’s strategy.”

BuzzFeed, once seen as a crown jewel in the digital media space, struggled after going public via a special purpose acquisition company, or SPAC, in 2021. The stock has fallen more than 90% since that time.

The disclosure of the stake raises more questions about BuzzFeed’s strategic direction. Ramaswamy, a 38-year-old biotech entrepreneur, endorsed Donald Trump after dropping out of the presidential race in January following the Iowa caucuses. He has built a reputation as an “anti-woke” activist opposed to corporate involvement in social and environmental causes.

In the past year, BuzzFeed has undergone major changes in an attempt to reach profitability.

BuzzFeed announced plans to shutter its news division and slash 15% of staffers, or about 180 employees, in April 2023. Earlier this year, the company said it would cut an additional 16% of its workforce “to reduce centralized costs and to allow the company to become more agile, sustainable, and profitable.”

Along with layoffs, BuzzFeed also sold digital media company Complex Networks, which it acquired in 2021 for about $300 million, to live video shopping platform NTWRK in a $108.6 million all-cash deal. BuzzFeed received approximately $5.7 million in severance and office-related charges on top of the purchase price.

Last week, the company reported an adjusted EBITDA loss of $11.3 million in the first quarter but said it expects adjusted EBITDA to come in the range of a $4 million loss to $1 million profit in the current quarter, “approximately flat year-over-year at the midpoint.”