Three Things (12/13)

Buzzfeed sells ‘Hot Ones’

Spicy separation … BuzzFeed (BZFD) has sold its hit YouTube series “Hot Ones” and its parent brand, First We Feast, to a consortium of investors led by Soros Fund Management for $82.5 million. The deal aims to address BuzzFeed’s financial woes, including declining ad revenue and mounting debt.

The sale represents a strategic shift for BuzzFeed, which has struggled as digital advertisers move to platforms like TikTok and Instagram. Once a darling of digital media, BuzzFeed’s stock has plummeted since going public, forcing it to focus on higher-margin revenue streams like programmatic ads and AI-driven content. CEO Jonah Peretti said the sale is part of efforts to prepare for an AI-powered future and reduce debt, which has been slashed by nearly $150 million this year.

BuzzFeed All-Time Chart

First We Feast, acquired by BuzzFeed in 2021 as part of its $294 million purchase of Complex Networks, will now operate independently. Founders Chris Schonberger and Sean Evans—who hosts “Hot Ones”—will lead the company. Evans will serve as Chief Creative Officer, while Schonberger will act as CEO. The pair plan to expand First We Feast with new shows, partnerships, and events.

“Hot Ones,” known for grilling celebrities with spicy wings and even spicier questions, has attracted stars from Gordon Ramsay to Natalie Portman. The series boasts over 14 million subscribers and billions of views. As BuzzFeed tightens its focus, “Hot Ones” embarks on what Evans calls a “spicy” new chapter.

Producer prices jump 0.4%

Coming in hot … November’s wholesale inflation rose more than expected, signaling persistent cost pressures despite broader disinflationary trends. The producer price index (PPI), which tracks prices businesses pay before goods reach consumers, climbed 0.4% month-over-month, surpassing economist predictions of 0.2%. Annually, PPI rose 3%, the sharpest increase since last February. Core PPI, excluding volatile food and energy costs, matched expectations with a 0.2% monthly increase but climbed 3.4% year-over-year, slightly exceeding forecasts.

These wholesale price trends often precede consumer inflation shifts. November’s consumer price index (CPI) rose 0.3% monthly, with a 2.7% annual gain, highlighting its steadier pace relative to wholesale prices. PPI’s quicker changes reflect cost pressures on producers that may translate to consumers later, providing early signals of inflationary trends. For investors, CPI gauges cost-of-living impacts, while PPI hints at future pricing pressures along the supply chain.

The Federal Reserve targets a 2% inflation rate, primarily monitoring the personal consumption expenditures (PCE) index. With inflation metrics diverging, policymakers face a complex task at next week’s meeting. Despite mixed data, markets anticipate a 0.25% rate cut, reflecting confidence in the Fed’s long-term disinflationary outlook.

ServiceTitan IPO tops expectations

Tech breakout … ServiceTitan, a SaaS platform for trades professionals, debuted on the Nasdaq under the ticker “TTAN,” pricing shares at $71—above its revised range of $65-$67. The IPO raised $625 million, valuing the Glendale, California-based company at $6.3 billion. It closed Thursday at $101.

Founded in 2012, ServiceTitan serves contractors in plumbing, HVAC, pest control, and more with cloud-based management software. The IPO reflects the company’s rapid growth, including a 24% year-over-year revenue increase to $198.5 million in Q3 2024, though losses widened to $47 million.

Image via ServiceTitan

This IPO marks a rare tech offering in a subdued market. High-profile IPOs have slowed since 2021 due to rising interest rates and inflation, but ServiceTitan joins companies like Reddit and Rubrik in reigniting investor interest. Analysts say the deal highlights renewed demand for growth-focused tech stocks as 2025 approaches.

Despite challenges in profitability, the IPO signals a potential rebound for tech IPOs, closing 2024 on an optimistic note. With contractors managing $62 billion in gross transaction volume through its software, ServiceTitan’s Nasdaq debut underscores both its industry impact and the resilience of the IPO market.

One more thing: A federal appeals court has overturned Nasdaq’s boardroom diversity rules, stating the SEC lacked authority to enforce them, marking a significant setback for corporate DEI initiatives. This decision underscores the growing legal and political pushback against diversity efforts in corporate America, as conservative groups challenge measures promoting inclusivity.

Disclosures:

As of writing, IBIT is a holding in Titan Crypto.

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