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Anti-woke crusader Ramaswamy builds stake in BuzzFeed

Published 2024-05-22, 10:31 a/m
© Reuters.  Anti-woke crusader Ramaswamy builds stake in BuzzFeed
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Proactive Investors - What is a meme stock?

In simple terms, it’s a stock that pumps in value, not because of any intrinsic underlying value, but because of artificial externalities.

GameStop (NYSE:GME) is the undisputed meme stock king, with AMC, Bed Bath & Beyond and, more recently, Trump Media & Technology Group Corp (NASDAQ:DJT) also top picks among meme stock traders.

We can add Buzzfeed Inc (NASDAQ:BZFD) to the pile too.

The one-time darling of internet clickbait soared 50% on Wednesday when it was discovered that American entrepreneur and brief presidential candidate Vivek Ramaswamy built a 7.7% stake in the business.

According to a 13D form filed with the Securities and Exchange Commission, Ramaswamy paid $3.95 million for 2.72 million BuzzFeed shares.

Ramaswamy, whose Strike Asset Management firm prides itself on ‘anti-woke’ and ‘anti-ESG’ investment principles, “believes the securities of the issuer are undervalued and represent an attractive investment opportunity”.

What does Ramswamy want?

In a 2023 interview with Politico, Ramaswamy laid out his anti-woke agenda: “We launched Strive and the asset management business last year to compete with larger asset managers like BlackRock (NYSE:BLK), State Street (NYSE:STT) and Vanguard, principally on differing our approach to shareholder engagement and proxy voting.

“Strive’s difference was to mandate companies to focus exclusively on delivering excellent products and services to your customer to maximize long run value without regard to any other social, political, environmental or non-pecuniary objectives.

His 2021 book ‘Woke Inc’ includes the sub-title: ’Inside Corporate America's Social Justice Scam’.

Which begs the question- what does Ramaswamy aim to achieve with this BuzzFeed stake?

BuzzFeed closed its news division in April 2023 and significantly reduced its workforce.

Today’s rally aside, the company is worth less than a 10th of what it was when it went public through an ill-fated reverse merger in 2021.

Put simply, the company is a shadow of its former self.

Per the 13D form: “(Ramaswamy) may consider, explore and/or develop plans and/or make proposals (whether preliminary or firm) with respect to, among other things, the matters set forth in the previous paragraph and potential changes in the Issuer's operations, management, organizational documents, board composition, ownership, capital or corporate structure, sale transactions, dividend policy, and strategy and plans.

(Ramaswamy) intends to communicate with the Issuer's management and board about, and may enter into negotiations with them regarding, the foregoing and a broad range of operational and strategic matters and to communicate with other shareholders or third parties, including potential acquirers, service providers, and financing sources regarding the Issuer.”

As the fourth-largest stakeholder in the business following his stake-building, Ramaswamy now holds considerable influence over the company’s direction.

As an ardent Trump supporter, outspoken Biden critic and espouser of libertarian ideals, it seems unfortunate for Vivek that BuzzFeed’s news offering is no more… at least for now.

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