160 words about BuzzFeed that will blow your mind

Quote of the Day

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Market Snapshot

• The S&P and Nasdaq fell despite a strong corporate profits report.
• European and Asian markets rallied higher, ignoring a North Korean missile test.
• Alibaba visited the debt markets for a $7 billion sale.
• Bitcoin sprung past $11,000 before crashing nearly $2,000.

Oh Que...So….What Do We Do Now?

Chipotle (+5.64%) CEO Steve Ells stepped down as dissatisfied investors look to turn the burrito chain around after a sluggish two years. While Chipotle doesn’t point to a specific reason for asking Ells to abdicate the burrito throne, we have an inkling it has to do with the multiple outbreaks of E. coli, salmonella, and norovirus at a handful of its 2,250 locations.

But it hasn’t been for lack of trying. To put out the fire, Ells...

• Closed over 2,000 locations for food safety training in early 2016.
• Appeared on the "Today" show to publicly apologize for an outbreak that left over 80 Boston College students with severe health complications.

Sadly for Ells, almost as soon as he walked off set, another outbreak occurred in July, and those Boston College kids are still wiiicked hungry for their free burritos.

And Chipotle’s not the only restaurant experiencing a major shake-up this year

JAB acquired both Panera Bread and Au Bon Pain, while Nestle bought a 68% stake in upscale coffee producer Blue Bottle for $425 million. And while Chipotle has opted to keep autonomy, Apollo is looking to buy rival Qdoba for $300 million.

Then, of course, there’s Roark Capital, which acquired BWW for $2.4 billion two days ago. It’s the latest addition to a restaurant conglomerate that has holdings in countless chains like Auntie Anne’s, Jimmy John’s, and Cinnabon.

In 2017 alone, conglomerates have spent $11.7 billion on restaurant acquisitions, compared to the annual average of $2 billion since 2008.

So what’s driving all this appetite for M&A?

Many fast food and casual restaurant chains have dipped in value since their IPOs (Noodles & Co. and Bojangles to name a few). Rising labor costs have strained profits, while a stream of newcomers routinely pull customers from industry vets.

So for now, Chipotle and other independent chains hope to stay afloat while hungry activists continue to buy up struggling restaurants.

Don’t Call Us a Social Media Company, That’s Fake News

In addition to refreshing Coinbase every couple minutes this week, remember to pop open Snapchat a few times. You may be one of the lucky users to test out its long-awaited design overhaul.

Sure, Snap (+0.66%) offers a new cast of dancing Bitmojis every time you hit “update” (that’s not gonna change). But with this new Netflix-style algorithm, the news on your Discover feed will be vetted and tailored specifically to your content-consuming history.

And as Spiegel explained, it will put a 1,000-foot pole between Snap and other social media sites like Facebook and Twitter, where a friends-sharing-algorithm has populated newsfeeds with Fake News. And let’s face it, did Bethany really root out the source before sharing “7 Things Ryan Gosling and Your Cat Have in Common”?

The new design/PR stunt comes at a pivotal time for Snap. Shares are down 45% since its IPO, Instagram Stories has almost lapped it in users (300M vs. 178M), and rev growth per user has been sluggish ($1.17 vs. $1.30 expected).

Let’s hope weeding out Fake News is the real answer.

160 Words About BuzzFeed That Will Blow Your Mind

BuzzFeed showed ESPN it’s not the only media company that can give employees the boot, laying off 8% of its U.S. workforce (mainly from its ad sales unit). Yes, there are stories BuzzFeed doesn’t want trending.

But CEO Jonah Peretti suggests there’s more to the madness than meets the eye. BuzzFeed is merely diversifying from its tried-and-true method of native advertising, and focusing on revenue drivers like e-commerce and video production (BuzzFeed Studios, it’s a real thing).

As for the shift, it’s no secret: Facebook and Google have cannibalized 63% of the market for U.S. digital ad spend. So much so that BuzzFeed will miss revenue expectations of $350 million this year by up to 20% (not to mention, it’s delaying a planned 2018 IPO).

Still, with a “more diverse and balanced” business, Peretti is hoping to keep that $1.7 billion valuation. Until then? He’s in a corner office somewhere, watching Tasty videos till it all blows over.

Not Today, Matt Lauer

Another major media personality was fired on allegations of sexual misconduct. This time, a female colleague brought a complaint against Matt Lauer, the 23-year veteran of the “Today" show on NBC. The details aren’t public, but we know the alleged incident dates back to NBC’s coverage of the 2014 Winter Olympics in Sochi, Russia. Two more complaints shortly followed.

If only this came as a surprise. Lauer joins other media bigwigs sent packing for similar allegations: Charlie Rose (CBS), Mark Halperin (NBC), Bill O’Reilly (Fox), and, just yesterday, Garrison Keillor (Minnesota Public Radio).

But Lauer may be the most high-profile of them all. He was the biggest name on the "Today" show, a morning tradition as popular as the snooze button. It generates $500 million for NBC and tops competitors ABC and CBS in the key 25-54 demo. And, hey, even we’d wake up at 2 AM every morning for Lauer’s salary of ~$15 million (the highest of any NBC journalist).

Now, he’s just another name on a list that’s growing by the day.

What Else Is Happening…

• A computer glitch has left 15,000 American Air flights without a pilot in December.
• British movie theater operator Cineworld is looking to buy Regal Entertainment for $3.6 billion.
• Uber lost $1.46 billion in Q3 (h/t Reuters).
• Gillette introduced a new line of lower-end razors.

Economic Calendar

• Monday     Earnings: No Events

                    Economic Events: New Home Sales (+)

• Tuesday    Earnings: No Events

                  Economic Events: Consumer Confidence (+)

• Wednesday    Earnings: Tiffany & Co (+)

                        Economic Events: GDP (+/-), Corporate Profits (+)

• Thursday   Earnings: Barnes & Noble, Express

                   Economic Events: Jobless Claims, Personal Income and Outlays

• Friday       Earnings: No Events

                 Economic Events: Motor Vehicle Sales, PMI Manufacturing Index, ISM Manufacturing Index

The Backburner: Battle for the Internet

Step aside Kim Kardashian—FCC Chairman Ajit Pai actually “broke the internet” when he announced his decision to repeal net neutrality, the 2015 rule requiring internet companies to treat all content equally.

Everyone from John Oliver to Cher has chimed in opposing the decision. But many everyday Americans are also outraged over the potential loss of a “free and open internet.” Congress has received 200,000 phone calls, while the FCC is busy swatting away half a million angry commenters on its site.

But Ajit Pai wants everyone to calm down, reminding Cher, “We need quality information, not hysteria, because hysteria takes us to unpleasant, if not dangerous places.”

Tech analyst Ben Thompson offers a different viewpoint altogether. While he’s in favor of unrestricted access to the internet, he views the current regulation as misguided: “The fact of the matter is there is zero evidence that harm exists in the sort of systematic way that justifies heavily regulating ISPs.”

The Breakroom

Question of the Day

The product of two whole numbers is 10,000. Neither contains a zero. What are the two numbers?

(Answer located at the bottom of newsletter)

Match the Founder with the Company

Founders: Pierre Omidyar, Franz Josef Popp, Lee Byung-chull, and the trio of Henry Wells, William G. Fargo, and John Warren Butterfield.

Companies: Samsung, American Express, eBay, BMW.

(Answer located at the bottom of newsletter)

Stat of the Day

1889 A.D.—The year Nintendo was founded. No, they weren't racing Mario Horse Carriages back then. Nintendo actually made playing cards until the 1960s, when it moved into other industries.

Breakroom Answers

Question of the Day: 16 and 625 (Explanation)

Match the Founder with the Company: Pierre Morad Omidyar (eBay), Franz Josef Popp (BMW), Lee Byung-chull (Samsung), Wells+Fargo+Butterfield (AmEx)