BuzzFeed (NASDAQ:BZFD) shares skyrocketed by nearly 60% in the premarket session today after former GOP Presidential candidate Vivek Ramaswamy revealed a 7.7% stake in the troubled digital media company.
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BuzzFeed is widely known for its portfolio of media brands such as HuffPost and Tasty. However, despite its popularity, shares of the company have slumped by nearly 93% over the last three years due to its weak financials.
A New Investor in BZFD
However, Ramaswamy’s stake disclosure is breathing new life into the stock today. Our data dive at TipRanks reveals that Ramaswamy also holds stakes in Roivant Sciences (NASDAQ:ROIV) and Arbutus Biopharma (NASDAQ:ABUS).
Investors, though, will be hoping for a major change of fortunes at BuzzFeed with this development. Last year, BZFD shuttered its news division, reduced its real-estate footprint, and resorted to layoffs. At the time, the company put its faith in the HuffPost brand.
This month, the company pivoted towards a stock-based compensation model, introducing stock incentives for senior leadership to tie compensation with performance. Notably, its CEO Jonah Peretti embraced a largely stock-based package, with a lower cash component. Additionally, the company announced a 1-for-4 reverse stock split earlier this month.
A New Hope for BuzzFeed
Meanwhile, Ramaswamy believes BuzzFeed shares are undervalued. The politician and entrepreneur plan to engage in discussions with BZFD’s board and management to maximize shareholder value. This could also imply a strategy shift at BuzzFeed.
Is BuzzFeed a Buy, Sell, or a Hold?
Interestingly, Craig-Hallum’s Jason Kreyer, the sole analyst currently tracking BuzzFeed, reiterated a Buy rating on the stock, alongside a $105 price target last week. Kreyer’s price target implies a nearly 4,100% potential upside in BZFD shares based on yesterday’s closing price.
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