Wednesday, May 11th 2022

Three Things (5/11)

Commentary

"The best way out is always through" – Robert Frost

1) Gas prices reach all-time highs in the U.S. after a surge in oil prices

  • The average price for a gallon of regular unleaded gas in the U.S. reached $4.37.
  • Russia’s invasion of Ukraine, coupled with an already strained supply chain, shocked the global energy markets in Q1.
  • WTI Crude oil prices neared $111 on Friday over the EU’s potential ban on Russian oil imports; the cost of oil makes up ~50% of the cost of gas at the pump, according to the AAA.

Titan’s Takeaway: Despite Q1’s negative GDP print, consumer spending has remained strong. The average American spends 3% of their income at the gas pump, and with no clear end in sight for elevated oil prices, consumers may look to save in other areas of their lives.

2) First released in 2001, Apple ends production of the iPod

  • Apple announced its plans to discontinue the iPod Touch, the last remaining model in its portable music players.
  • The product move was expected as the iPod hasn’t played a major role in the company’s product strategy for several years.
  • The simplicity and virality of the iPod undoubtedly served a major role in driving Apple to where it is today.

Titan's Takeaway: Apple choosing to sunset its flagship product marks the end of an era that closes a company defining chapter in its history. As investors in Apple, we appreciate the role the iPod played, but are looking forward to another two decades of product innovation..

3) VC backed e-commerce startup, Faire, raises flat Series G extension

  • Online wholesale marketplace, Faire, raised a $416 million extension to its Series G financing from November which doubled the fundraising round.
  • Faire connects emerging independent businesses around the world with local retailers so the scope of their distribution can increase.
  • The company’s cash infusion is likely a move to bolster its balance sheet in the face of rising rates, high inflation, and what is expected to be a challenging financing environment.

Titan’s Takeaway: Private companies are following their public peers to bolster their balance sheets ahead of uncertain times. Although extensions are generally flat rounds, we expect flat rounds to be a sign of support from VC backers during this turbulent period.

As of this writing, AAPL was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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