Former Republican presidential candidate Vivek Ramaswamy is pushing for big changes at money-losing news website BuzzFeed.
“The company was a pioneer of the social internet, when referral traffic from Facebook seemed like it would never end. Legacy media companies and publishers believed that BuzzFeed had the secret sauce, so much so that they invested at sky-high valuations, copied the strategy, or both,” Ramaswamy said in a letter to the company’s board that he posted on X, formerly known as Twitter.
“Now, the social-internet model is dying or dead, and BuzzFeed is caught without a viable strategy.”
Ramaswamy, a Cincinnati-area native and suburban Columbus businessman, says in the letter that he is now the second largest Class A shareholder with an 8.37% stake in the company and that he continues to increase his position.
He’s calling for restructuring the company, staff cuts and adding three people to the board that he’s recommending. He offered to arrange meetings between these candidates and the company’s board, and urged the board to act on the three by July 15.
“Nearly every legacy media company has failed its audience,” he said on X. “The first one to openly admit it & make major changes should soar.”
Ramaswamy said BuzzFeed should invest further in creator-led video and audio where it has a competitive advantage.
“Make BuzzFeed a bold, distinctive brand,” he wrote. “Distinguish yourself from competitors by openly admitting your past journalistic failures and redefine BuzzFeed’s brand around the pursuit of truth.”
He urged the company to post content and have a staff who represent all political viewpoints. He noted only two donations to Republican candidates from staff out of 214 political contributions.
“While your competitors focus on racial and gender diversity in the boardroom, you can become the first media company to expressly select for a diversity of viewpoints in your ranks,” he said.
In response to Ramaswamy’s letter, BuzzFeed CEO Jonah Peretti said he agreed that the brand is undervalued, but took exception to what is needed to turn it around.
“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 told Ramaswamy. “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.
“That said, I welcome outside perspectives from shareholders and am open to hearing more from you. 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.”
Ramaswamy, a wealthy biotech entrepreneur, has pushed a variety of conservative causes in recent years, including in business where he has established an investment management firm, Strive Asset Management, to counter other management companies that he says focus too much on other issues such as climate change and ensuring representation for women and minorities on corporate boards.
He also has written books promoting conservative causes such as “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”
He discontinued his campaign for president after finishing fourth in the Iowa Republican Caucuses in January.
When BuzzFeed went public in December 2021, it had a value of $1.5 billion. The company’s shares have tumbled sharply and today, BuzzFeed is worth a little more than $100 million and that’s even with a jump in the value of shares this month.
“Rather than cutting from the top, the company should start from zero and retain only the resources required to create and monetize BuzzFeed’s highest-value content,” Ramaswamy told the company. “This will almost certainly require large-scale headcount reductions, dumping your legacy digitized print business model, and divesting assets to repay debt. The result should be a dramatically smaller, more focused, more nimble, less levered, day 1 profitable company. This should be achievable in 2-3 months.”
This article originally appeared on The Columbus Dispatch: Former Republican candidate Vivek Ramaswamy buys big into BuzzFeed
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