{"id":85,"date":"2021-03-18T11:45:50","date_gmt":"2021-03-18T15:45:50","guid":{"rendered":"http:\/\/blogs.dalton.org\/thebottomline\/?p=85"},"modified":"2021-05-19T23:25:11","modified_gmt":"2021-05-20T03:25:11","slug":"breaking-financial-news","status":"publish","type":"post","link":"https:\/\/blogs.dalton.org\/thebottomline\/2021\/03\/18\/breaking-financial-news\/","title":{"rendered":"Breaking Financial News"},"content":{"rendered":"\n

On February 8th, Tesla reported in its latest annual report that it had acquired 1.5 billion dollars worth of bitcoin, stating that the decision was made in hopes to \u201cdiversify and maximize returns on [their] cash that is not required to maintain adequate operating liquidity.\u201d This announcement came after Elon Musk\u2019s public endorsement of the cryptocurrency on Twitter. Musk also stated that his company would soon be accepting bitcoin as a form of payment for its products, a declaration that caused Bitcoin prices to soar by over 10%. While this purchase of Bitcoin is considered to be the largest by a public company, Tesla is not the only company that has recently disclosed bitcoin holdings. In the summer of 2020, MicroStrategy Inc. announced that they had purchased roughly 425 million dollars worth of the cryptocurrency. With the growing adoption of cryptocurrency as a form of accepted payment, Bitcoin and similar products have the potential to completely revolutionize our economic structure. The question now lies in whether these acquisitions represent a preoccupation with a passing fad or rather an insight into how we will conduct future financial transactions. By: Natalie Martin<\/sub><\/p>\n\n\n\n

Winter storm Uri has plagued the Gulf Coast, bringing the coldest temperatures in decades and leaving over 4.4 million homes and businesses in Texas without electricity. These power outages have not only affected those living in Texas, however. Oil and gas production companies have been hit extremely hard by the freezing weather as refineries have been forced to reduce production or shut down completely in order to conserve more electricity for the public. Texas\u2019 refineries represent some of the biggest in the country, responsible for supplying a large portion of our nation\u2019s gasoline. While these shutdowns are said to last only until the weather warms up, their halted production will prove to have a considerable impact on gasoline prices. In fact, it is estimated that in the next several days, the cost of gas could rise by as much as ten cents per gallon across the country. And, while this price surge is thought to be temporary, experts are unsure as to how long it will take for the industry to fully recover.  By: Natalie Martin<\/sub><\/p>\n\n\n\n

To ring in the new year, the Congressional Budget Office (CBO) introduced the Raise the Wage Act of 2021. This act plans to gradually increase the federal minimum wage to $15 dollars by 2025 for nearly 32 million Americans. The CBO projects that when the $15 minimum wage is increased, the number of people in poverty will decrease by 0.9 million. However, they also project that, under the Raise the Wage Act, interest rates will be increased slightly and will consequently reduce real GDP which will inevitably have a slightly negative effect on the American economy. For decades, the American people alongside certain politicians have been in a fight to raise the minimum wage. Although 10 states have committed to gradually increasing their minimum wage to $15, the Raise the Wage Act will require all states to enforce a $15 minimum wage by 2025. Democrats believed that this year more than ever, the Raise the Wage Act would serve best being included as a part of President Biden\u2019s 1.9 trillion dollar COVID Relief bill. On February 25, the Senate parliamentarian, Elizabeth MacDonough decided that the $15 minimum wage package was not to be included in Biden’s relief bill. Although disappointing for the Democrats, the decision does not rule out a $15 minimum wage in the future.\u00a0 By: Nola James<\/sub><\/p>\n\n\n\n

Business tycoon and investor Warren Buffett recently issued his annual letter to Berkshire Hathaway Incorporated, the company he founded and currently chairs. The letter-writing tradition at Berkshire has lasted for 60 years and has not only served as a beacon of another successful year internally but also a key source of information for investors in every niche of the market. In a time in which many are craving normalcy and a sense of familiarity and tradition, Buffett assured readers to never \u201cbet against America\u201d. His company brought in 42.5 billion dollars in 2020, proving that the economy, just as its people, is able to withstand and rise to any occasion. He paid close attention to Middle America in his letter, stating that the finance industry\u2019s gaze is too often towards coastal areas, straying away from the part of the country that happened to do better financially during COVID (this may be in part attributed to the fact that many of these states have had more relaxed COVID restrictions and are therefore re-opening many more businesses). The company bought back most of its shares this past year, and Buffett assured his employees that, moving forward, over-purchasing of shares would not occur. This notion is unlike what many other CEOs commonly do for their companies, something that Buffett labeled in his letter as \u201cembarrassing\u201d. Buffett does seem to be slowing down with age, and his letter perfectly demonstrated that Berkshire Hathaway Incorporated remains just as committed as ever to maintaining its aggressive nature. By: Charlotte Effron<\/sub><\/p>\n\n\n\n

In the past few months, many celebrities have put aside the more typical investments in golf resorts and real estate property and instead are turning their focus to buying SPAC\u2019s (special purpose acquisition companies). Barry Ritholtz, an investor with a keen eye for Wall Street analytics, claims \u201cWhat always happens with investors, no matter the asset class of the decade, somebody hits the lottery and everyone else piles in. The SPAC enthusiasm is just investor behavior. People look at these as lottery tickets, and very often they\u2019re not.” Notable celebrities currently obtaining SPACs include Jay-Z, Serena Williams, Steph Curry, Colin Kaepernick, Alex Rodriguez, and Shaquille O\u2019Neal. Most of the listed influencers do not have backgrounds in finance, making SPACs that much more alluring due to their quick money feedback and the opportunity they pose for complete control in owning them. Because SPACs have a history of falling below the value of their IPOs, their investors face less certainty regarding their guaranteed profit. However, despite this increased riskiness, the SPAC investment for 2020 was well above 40 billion dollars. Popular companies like DraftKings and Nikola Motor Co. have managed to go public due to their SPAC mergers. SPACs offer a unique opportunity for investors and companies alike for if one choose to raisee money through an IPO, they have a better chance of later acquiring a new company. When done right (usually when handled by a trustworthy and experienced businessperson), SPACs can be very successful, but when done wrong, the obscure purchase can quickly backfire. It will be interesting to see whether the hype surrounding SPACs is simply a passing fad or if it represents a lasting shift. By: Charlotte Effron<\/sub><\/p>\n","protected":false},"excerpt":{"rendered":"

On February 8th, Tesla reported in its latest annual report that it had acquired 1.5 billion dollars worth of bitcoin, stating that the decision was made in hopes to \u201cdiversify and maximize…<\/p>\n","protected":false},"author":4204,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[331117],"tags":[331103,331109,331106,331110],"ppma_author":[331123],"class_list":["post-85","post","type-post","status-publish","format-standard","hentry","category-the-bottom-line","tag-breaking-financial-news","tag-charlotte-effron","tag-natalie-martin","tag-nola-james"],"authors":[{"term_id":331123,"user_id":4204,"is_guest":0,"slug":"c22nm1-2","display_name":"EBITDAlton Team","avatar_url":"https:\/\/blogs.dalton.org\/thebottomline\/wp-content\/wphb-cache\/gravatar\/254\/25498de874dab1cc6a0eafb4e96927c1x96.jpg","1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/posts\/85","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/users\/4204"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/comments?post=85"}],"version-history":[{"count":0,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/posts\/85\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/media?parent=85"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/categories?post=85"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/tags?post=85"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.dalton.org\/thebottomline\/wp-json\/wp\/v2\/ppma_author?post=85"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}