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Vivek Ramaswamy met with resistance at BuzzFeed, urges ‘major shift’ to save struggling company

May 28, 2024 | | Print Article

The troubled BuzzFeed media company needs to make a “major shift” to survive, according to shareholder Vivek Ramaswamy who suggested new strategies, rebranding, and an apology from the company to its audience.

But part of Ramaswamy’s outreach to the company’s board of directors was met with a definitive ‘no’ from its CEO who told the former 2024 Republican presidential candidate that he had “some fundamental misunderstandings” about the media outlet.

Ramaswamy is the second-largest Class A shareholder in the media outlet which continues to bleed money as its market value of just under $100 million is a far cry from its previous $1.5 billion before going public in December 2021.

His purchase of BuzzFeed shares this month gave him an 8.37% stake in the company and he addressed the company’s past and future in a seven-page letter to its board of directors.

“The public markets have spoken,” Ramaswamy wrote. “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.”

“Almost two decades after its founding, BuzzFeed is now effectively a startup with a paltry ~$100 million market capitalization,” he added. “I view that as an opportunity.”

Despite once being a “pioneer of the social internet,” now “the social-internet model is dying or dead, and BuzzFeed is caught without a viable strategy,” Ramaswamy said.

But all is not lost, as the entrepreneur suggested ways the company could revive with job cuts, a culture shift, and earning back the trust of its audience. Ramaswamy reminded the board of the many times the media company failed such as when it chose to publish the uncorroborated Steele Dossier.

Ramaswamy warned the board of directors that BuzzFeed could be looking at bankruptcy by the end of the year if significant changes are not made swiftly. He urged a change in the business model and unfurled a new strategy in three phases, Get Back to Startup Size, Invest in Creator-Led Audio & Video Content, and Make BuzzFeed a Bold, Distinctive Brand.

“Americans are desperately turning to other sources of information, such as independently distributed audio and video podcasts,” he said, noting that the outlet’s competitors “are equally bad.”

“Against this backdrop, you have a historic opportunity to redefine BuzzFeed and set yourself apart from every other major media organization,” Ramaswamy said

He recommended the company tell its audience, “We failed in our obligation to tell you the truth.”

In addition, “true intellectual diversity, both in its rank-and-file and in its leadership” will be needed if BuzzFeed is going to rebrand successfully, according to Ramaswamy. He also addressed that some may object to his views because of his participation in the 2024 presidential race as a Republican. Still, he argued that the company should “hear from someone who shares views in common with [more than] 150 million Americans.”

“The three new directors who have expressed interest in joining your board will represent a first step in the right direction,” the letter continued.

This “strategic pivot” would be BuzzFeed’s “best chance to rapidly create shareholder value, without the massive capital demands usually required to fuel vertical growth, at a moment when customers are longing for something that you can uniquely provide.”

CEO Jonah Peretti thanked Ramaswamy for his letter but countered that the 38-year-old lacked an understanding of the company.

“I’m glad you think BuzzFeed is undervalued – I totally agree!” he wrote in the letter, according to Fox Business.

“Based on your letter, you have some fundamental misunderstandings about the drivers of our business, the values of our audience, and the mission of the company,” he added.

“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,” he wrote.

“That said, I welcome outside perspectives from shareholders and am open to hearing more from you,” Peretti told Ramaswamy. “I’d also love the opportunity to better explain the strategy that we’ve outlined on our recent earnings calls, and why we’re so confident it will create the most value.”

Frieda Powers
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