Three Things (4/22)

StubHub IPO

StubHub is eyeing an initial public offering this summer with a valuation of at least $16.5 billion, the same valuation it received during its last round of private funding in 2021. The company has been a major player in the ticketing industry since 2000, and its IPO has been in the works for over two years. Its ownership has taken many forms since eBay purchased StubHub for $310 million in 2007, and the company’s co-founder later bought it back for $4 billion in 2020.

In recent years, demand for live events, concerts, and in-person experiences has shot up, and companies like StubHub and Ticketmaster have been beneficiaries (not without drama, h/t Taylor Swift). StubHub would join competitors, Vivid Seat and Live Nation should the company test the public waters. Given expectations of disinflation and lower interest rates, we are seeing more IPO aspiring companies materialize plans to go public in 2024 and 2025.

Home sales drop

Home sales for previously owned homes dropped 4.3% in March, and sales were 3.7% lower year over year. Although inventory improved significantly during the month, less people are buying homes due to increasing mortgage rates. All-cash purchases account for 28% of home sales, as more buyers are avoiding loans all together.

Today’s pool of prospective homebuyers has shrunk compared to previous generations – more debt and higher housing costs have made it difficult to afford a first home. In 2020, 2% interest rates drove a surge in home buying that dried up much of the supply in the housing market. While timing is uncertain, rates will eventually decline and gradually bring buyers back to the table while also supporting a stable supply.

Bitcoin halving

On Friday, after market close, Bitcoin completed its fourth halving which dropped the issuance rate of new bitcoins from 6.25 to 3.125 every ten minutes. The price of bitcoin has been volatile leading up to the halving event, falling about 4% during the week prior. The halving occurs approximately every four years and has historically always been followed by a rally in the price of BTC. However, this year Bitcoin reached all time highs in the months before the event likely because of the launch of Bitcoin ETFs.

The halving is expected to trigger consolidation and business closures among mining companies, which validate the information on blockchain. Because the event slashes miners’ revenue, they have been preparing by diversifying their business models, upgrading facilities, and even integrating artificial intelligence into their infrastructure. The wave of consolidation should ultimately be good for the remaining players so long as the economic incentives remain compelling enough to support their changing business models.

Disclosures:

As of the date of publishing, Titan’s Crypto strategy holds IBIT, an ETF investing in Bitcoin.

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