🔪 Warner Bros. Discovery fails

Good morning investors! Let’s start another exciting week with a look at what’s happening in the market.

Today we cover:

• Rich Americans evade taxes.

• Warner Bros. Discovery fails.

• Why you should worry if you have a bad credit score.

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📊 Economy and News 

Rich Americans evade taxes

American millionaires and billionaires are evading more than $150 billion a year in taxes, according to the latest reports.

A large number of Americans are leaving the country due to high prices and taxes. However, the US is among the countries that tax nationals on worldwide income no matter where they live. However, there are some foreign earned income exclusions and/or foreign income tax credits.

The IRS is now getting serious about collecting tax money and has launched a crackdown on tax evaders, including individuals and companies.

The IRS believes that greater IRS enforcement will result in an additional $561 billion in tax revenue between 2024 and 2034. The agency seems to be doing pretty well – raising about $6 in revenue for every extra dollar spent on enforcement.

The agency has had great success so far and has identified 1,600 millionaire taxpayers who have failed to pay at least $250,000 each in assessed taxes. It has so far collected over $480 million from the group with plans to collect more.

The agency is now looking at areas it had neglected before, such as the ownership and use of private jets.

Global hits:

• After doubts about Alibaba’s future, co-founder Joe Tsai says: ‘We’re back’.

• AT&T to reimburse (some) customers after a massive network outage.

• Reddit hasn’t turned a profit in nearly 20 years, but it just filed to go public anyway. Furthermore, eToro also has plans to go public.

📈 Stocks

S&P 500 5,088.80 (+0.035%)
DJIA 39,131.53 (+0.16%)
NASDAQ 17,937.61 (-0.37%)
BRENT CRUDE 81.10 (-0.64%)
* Prices as of Feb 26th, 12:20 AM UTC

Warner Bros. Discovery misses earnings

Warner Bros. Discovery (WBD, -9.94%) missed analyst estimates for both revenue and earnings as advertising revenue slumped.

Here are the numbers:

• Loss per share: 16 cents vs. 7 cents expected

• Revenue: $10.28 billion vs. $10.35 billion expected

In a bright spot, the company said it gained new subscribers in the quarter, with 97.7 million streaming customers at the end of the period, up from 95.9 million reported in the previous quarter.

The company expects Max to be profitable in 2024, but some losses are expected due to content generation in the first half of the year.

Warner Bros. Discovery forecast Max would generate EBITDA of $1 billion for 2025.

We’re secure: Warner Bros. Discovery CEO David Zaslav said the company was on a "clear pathway to growth," generating $6.2 billion in free cash flow and paying down $5.4 billion in debt in 2023.

Future plans: It has plans to roll out its Max streaming service in key international markets.

The company has plans to go big with the sports joint venture but it did not provide new details regarding it.

Buffett is still profitable

Berkshire Hathaway posted operating earnings — which refers to profits from businesses across insurance, railroads and utilities — of $8.481 billion in the fourth quarter.

Operating earnings rose to $37.350 billion in 2023, up 17% from $30.853 billion in the prior year.

Berkshire held $167.6 billion in cash in the fourth quarter, a record level that surpasses the $157.2 billion the conglomerate held in the prior quarter.

Top gainers and losers of the week: sponsored by The Yellowbrick Road

🔐 Crypto

Bitcoin $51,028 (-1.36%)
Ethereum $3,049 (-2.03%)
Total market cap $2T (-0.9%)
* Prices as of Feb 26th, 12:20 AM UTC

A look at crypto

Major crypto prices haven’t moved much in the last few days.

• Bitcoin falls far short as a global currency, central bankers say.

• Ethereum (ETH) price soared to a new 2024 peak around $3,050, on Sunday Feb 24. Plus, some think ETH Spot is a possibility.

• A federal judge has signed off on crypto exchange Binance's $4.3 billion plea deal with the U.S. Department of Justice.

• Uniswap's governance token UNI gained 60% after a proposal by a key Uniswap Foundation leader to overhaul the protocol's decision-making.

• Satoshi Nakamoto warned that Bitcoin could become a significant consumer of energy in 2009 emails.

• Blockchain researcher recovers stolen funds from NFT heist. Plus, a $100 million fraud scheme has been uncovered in Myanmar.

💵 Personal Finance

Why you should worry if you have a bad credit score

A bad credit score can have a huge impact on your life. Here’s how it can affect an individual:

• Loans will be more expensive with the interest rate on credit cards often going above 30% for people with a poor credit score. This applies to almost all types of loans, including mortgages, auto loans, and more. Look at the current scenario. In this situation, an applicant with a score of 620 will pay about 4.8% in interest for a $300K house, whereas someone with a score of 760 or higher will pay only 3.2%.

• You’ll have fewer mortgage and credit card options since some companies only work with people with a good credit score. In fact, Experian says that 620 is the typical requirement to qualify for a mortgage.

• You might see higher insurance premiums since insurance companies take this factor into consideration when giving a quote.

• It can be hard to convince landlords since most are known for running credit checks. They can see your credit report, not your specific credit score. Most look at the payment history portion of a credit report to find potential problem areas. For example, they can see if you have been evicted in the past.

• This might come as a surprise but finding a job can be difficult if you have a poor credit score. Some employers look at the credit score when gauging potential candidates. Applicants with a bad credit history are considered unreliable.

• Utility providers pay special attention to the credit score and may ask for a deposit if you have a poor credit history. The law says that utility companies can ask for deposits from all customers, but some may waive it if a customer has a good credit score. Similarly, in some cases, a letter of guarantee, which is defined as a promise by a third-person to pay if you default, may suffice.

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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