BuzzFeed shares saw a significant increase of up to 83% in early trading on Wednesday following the news that Vivek Ramaswamy, a former Republican presidential candidate, had acquired a 7.7% stake in the company. Ramaswamy plans to engage with the board of directors to discuss potential operational and strategic changes to enhance shareholder value, as he believes the stock is undervalued and presents a good investment opportunity.
BuzzFeed encountered challenges after going public through a special purpose acquisition company in 2021, with its shares dropping more than 90% since then. The involvement of Ramaswamy, known for his endorsement of Donald Trump and as an “anti-woke” activist, brings to light further speculation on BuzzFeed’s strategic direction.
In an effort to achieve profitability, BuzzFeed announced significant changes last year, including the closure of its news division and the reduction of staff by 15%, or approximately 180 employees. This year, the company revealed plans to cut an additional 16% of its workforce to streamline operations and improve profitability. Additionally, BuzzFeed sold Complex Networks, which it had acquired in 2021 for about $300 million, to the NTWRK live video purchasing platform in a $108.6 million all-cash deal.
Despite reporting an adjusted EBITDA loss of $11.3 million in the first quarter, BuzzFeed anticipates that its adjusted EBITDA will range from a $4 million loss to a $1 million profit in the current quarter, remaining relatively unchanged compared to the previous year at the midpoint. These developments point to ongoing efforts within BuzzFeed to navigate the challenges of the digital media landscape and position itself for future success.
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