Vivek Ramaswamy, the second-largest Class A shareholder of BuzzFeed with an 8.37% stake, has outlined a three-phase turnaround plan for the digital media company in a letter to its board of directors. Ramaswamy, a former Republican presidential candidate and biotech entrepreneur, wrote the letter as BuzzFeed’s market capitalization languishes around $100 million – down over 75% from its $1.5 billion valuation when it went public in December 2021.

In phase one of his proposed strategy, Ramaswamy calls for BuzzFeed to “get back to startup size” through major staffing reductions and asset divestitures. He argues this dramatic downsizing is needed to create a “dramatically smaller, more focused, more nimble, less levered, day 1 profitable company” in just 2-3 months. BuzzFeed lost $60 million in 2023 and $26 million in Q1 2024, with revenue declining 26% year-over-year in 2023 and expected to fall again by double-digits in 2024. Ramaswamy warns the company faces “a nonzero risk of bankruptcy in December 2024” when noteholders could force repayment of over $100 million in outstanding convertible debt.

In phase two, the slimmed-down BuzzFeed would shift investment toward “creator-led audio & video content.” Ramaswamy cites the success of BuzzFeed’s “Hot Ones” show and points to Goldman Sachs projections that creator economy revenue will hit $500 billion by 2027. He envisions BuzzFeed attracting top internet creators with an “eat-what-you-kill” model that gives talents uncapped upside from the content they generate, similar to strategies used by firms like hedge fund Millennium.

For phase three, Ramaswamy urges BuzzFeed to develop “a bold, distinctive brand” by openly admitting past “journalistic failures,” such as publishing the Steele dossier and initially amplifying now-debunked claims around the Trump-Russia investigation. He argues BuzzFeed should rebrand itself around the “pursuit of truth” by fostering open ideological diversity among voices and perspectives rather than pursuing a centralized news model.

To oversee this pivot, Ramaswamy has identified three prospective new directors for BuzzFeed’s board who have experience in new media. He requests that they be added by July 15. The letter emphasizes the need for “true diversity of thought” in BuzzFeed’s leadership ranks, citing data that 99% of employee political contributions since 2010 went to Democrats.

While acknowledging that “most media startups fail” and “most debt-loaded micro-cap stocks don’t become billion-dollar companies,” Ramaswamy believes that his strategic pivot “represents, by far, your best chance to rapidly create shareholder value.” He urges BuzzFeed’s board to embrace the opportunity or risk “extinction.”

BuzzFeed CEO Jonah Peretti responded to Ramaswamy in a letter the company shared with Fox Business: 

“I’m glad you think BuzzFeed is undervalued – I totally agree! 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. 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 explain better the strategy that we’ve outlined on our recent earnings calls and why we’re so confident it will create the most value.”