Edge One Capital, a major investor in BuzzFeed, has sent a letter demanding a dramatic overhaul of the company’s corporate board and governance structure. In the letter, Edge One Capital accuses BuzzFeed CEO Jonah Peretti of operating with little accountability and criticizes the board’s lack of relevant experience and ineffective oversight. The investment firm points to the company’s recent acquisition of Complex Networks, which resulted in a significant loss of shareholder value, as well as the ongoing decline in BuzzFeed’s revenue as evidence of the board’s failures.
The letter details several concerns with BuzzFeed’s current governance structure, highlighting provisions that are widely considered anti-shareholder, such as a classified board, a supermajority vote requirement to remove directors, and a dual-class share structure that grants disproportionate voting power to Jonah Peretti. Edge One Capital argues that this structure disenfranchises the majority of shareholders and undermines accountability.
Edge One Capital also raises concerns about the lack of relevant expertise among BuzzFeed’s current board members. The letter points out that many directors lack the necessary experience in media, technology, or turnarounds, making them ill-equipped to guide the company through its current challenges. Specifically, the letter criticizes the board’s decision to retain the services of Greg Coleman, a board member with a history of working with BuzzFeed, as a paid advisor, despite his lack of demonstrable success in previous roles.
The letter also calls for a transition to a ‘one share, one vote’ structure, which would give all shareholders an equal say in the company’s future. Edge One Capital argues that this change would better align BuzzFeed with long-term value creation and shareholder fairness.
Edge One Capital concludes the letter by calling on BuzzFeed’s independent directors to step up and assert their influence over management to ensure that the company’s strategy aligns with the best interests of all shareholders. The investment firm warns that failure to uphold these fiduciary duties could lead to long-term legal and reputational risks for BuzzFeed.
The letter is a clear signal that shareholder dissatisfaction with BuzzFeed’s current leadership and governance structure is growing. It remains to be seen how BuzzFeed’s board will respond to this call for change, but the company’s future may hinge on its ability to address these concerns.
