Former 2024 GOP presidential candidate Vivek Ramaswamy has issued a seven-page letter to BuzzFeed's board of directors, reviewed by FOX Business, urging the troubled media company to add three more directors he has vetted and adapt its business model to survive as the company hemorrhages money.
Since going public in December 2021, BuzzFeed's market value has plummeted from around $1.5 billion to just under $100 million. While shares of BuzzFeed have rallied 180% this year, the recent boost coincided with reports of Ramaswamy's buying of the shares. He is now the second-largest Class A shareholder with an 8.37% stake.
"The public markets have spoken," Ramaswamy said, adding, "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," Ramaswamy said.
Still, the stock is well off its peak of around the $40 per share level reached in 2021.
"Almost two decades after its founding, BuzzFeed is now effectively a startup with a paltry ~$100 million market capitalization," he said. "I view that as an opportunity."
Ramaswamy said BuzzFeed was once a "pioneer of the social internet," attracting sky-high valuations, but now "the social-internet model is dying or dead, and BuzzFeed is caught without a viable strategy."
He also stressed BuzzFeed has an opportunity to redefine its purpose, by regaining the public’s trust in the media. He pointed to past blunders by BuzzFeed, including publishing the uncorroborated Steele Dossier or reporting that President Trump allegedly directed Michael Cohen to lie about construction of a building in Moscow, which was later rebutted by Special Counsel Robert Mueller's report.
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With revenue expected to decline further, Ramaswamy implored BuzzFeed to transform its business model now that more companies are relying on burgeoning AI technologies. He forecasted that BuzzFeed faced likely bankruptcy by the end of 2024 if it fails to adapt its business model.
To get back on track, Ramaswamy recommended the company roll out 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.
The silver lining in all of this, Ramaswamy argued, was that the competitors of BuzzFeed "are equally bad."
"Americans are desperately turning to other sources of information, such as independently distributed audio and video podcasts," he said. Against this backdrop, you have a historic opportunity to redefine BuzzFeed and set yourself apart from every other major media organization," Ramaswamy said, recommending that the company admit to its audience: "We failed in our obligation to tell you the truth."
For a rebranding and reshuffling to take place, Ramaswamy said, the company should focus on fostering "true intellectual diversity, both in its rank-and-file and in its leadership."
As an example, he noted that of the more than 200+ "political contributions made by BuzzFeed employees since 2010, only 2 were to Republicans. The number doesn’t have to be 50%, but less than 1% is just abysmal for any company that claims to pay homage to "diversity" in its hiring practices" he said.
Ramaswamy anticipated partisan objections from the company, invoking his bid as a Republican contender in the presidential race, but suggested that it may be in the company’s best interest "to hear from someone who shares views in common with [more than] 150 million Americans." Ramaswamy also invoked his credentials as a "serious founder" who has created multiple multi-billion-dollar start-ups.
"The three new directors who have expressed interest in joining your board will represent a first step in the right direction," he said.
This "strategic pivot," Ramaswamy suggested, 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."
Audience members who love the new mission, Ramaswamy said, "are likely to also support [BuzzFeed] as shareholders."
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Ramaswamy closed the letter by urging BuzzFeed’s board to add three proposed new directors by July 15.
"I look forward to arranging meetings in the coming weeks," Ramaswamy said.
