Entrepreneur Vivek Ramaswamy, the former Republican presidential candidate, purchased a minority stake in the digital publishing platform BuzzFeed this week.
This investment comes even though the company shut down the media outlet it used to run earlier this year.
After the announcement of his investment, the company’s shares skyrocketed in value. Early on Wednesday, the company’s shares increased 22%, to roughly $3.05 per share.
According to a Securities and Exchange Commission filing, Ramaswamy acquired a 7.7% minority stake in BuzzFeed. In the filing, the entrepreneur said he believed that the company’s stock price is undervalued, and is hoping to soon speak with its management and board members.
BuzzFeed first went public in 2021, but they’ve had a lot of trouble boosting their sales. The company began big job cuts late in 2022, as BuzzFeed cited a poor environment for digital advertising at the time.
Early in 2023, the company announced that it would shut down BuzzFeed News, its digital media outlet that had won multiple Pulitzer Prizes for its work.
Jonah Peretti, the co-founder and CEO of BuzzFeed’s parent company, wrote a memo at that time to staff, saying that in addition to layoffs in the news division, other layoffs would be occurring in the company’s administrative, tech, content and business teams.
During its first-quarter earnings report, BuzzFeed reported a $35.7 million loss, equivalent to 72 cents per share. The company brought in a total of $44.8 million in revenue.
In the first quarter, advertising revenue dropped 22%, while revenue from content also declined 19%. In addition to that bad news, BuzzFeed is projecting that its revenue situation is only going to get worse.
That didn’t stop Ramaswamy from making his investment in the company, though. He has made his living as an entrepreneur, earning hundreds of millions of dollars over his career.
He graduated first from Harvard University and then from Yale Law School. He has since worked in pharmaceutical research and with hedge funds.
But, he made the most headlines over the last year when he decided to throw his hat into the ring and run for president as a Republican. Ramaswamy was always an underdog and unlikely winner, but he did turn a lot of heads with what he said.
He was a consistent critic of mainstream politics and his competitors in the GOP and the Democratic Party.
Ultimately, he dropped out of the race after he didn’t make enough in-roads with voters, and then decided to endorse presumptive GOP nominee Donald Trump.
Ramaswamy has even been mentioned as an outside possibility to be named Trump’s VP. If that were to happen, it would team up two former entrepreneurs on the Republican ticket.
It would also mean that both the presidential and vice presidential candidate would own at least part of a media company — Ramaswamy with BuzzFeed and Trump with the Trump Media and Technology Group, which owns Truth Social.