🎉 Reddit's IPO Has Arrived

1) Berkshire Nears $170B In Cash 2) Nasdaq’s Big 7, 3) Reddit’s IPO Has Arrived, and more!

It’s Tuesday.

This weekend Warren Buffett shared his 2023 annual letter.

For those of you that don’t know, I recently created a website that compiles 100+ resources showcasing Warren Buffett’s interviews, lectures, public writings, and more.

It includes 40 hours of unedited video content and nearly 1,000 pages of investment wisdom.

Buffett is an excellent teacher and I hope you learn something from this free resource!

As always, a huge thank you for being a loyal subscriber and reader!

Some key data bites you should know: 

In today’s newsletter:

  • 💰 Berkshire Nears $170B In Cash

  • 🏋️ Nasdaq’s Big 7

  • 💬 Reddit’s IPO Has Arrived

Let’s dive right in!

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💰 Berkshire Nears $170B In Cash

Last Saturday, Berkshire Hathaway released their 2023 annual report.

The report featured the company’s annual earnings and also saw Buffett pay a tribute to his best friend, Charlie Munger.

The company saw a notable 21% increase in its full year operating earnings, reaching $37.4B.

Buffett prefers to measure Berkshire's performance using operating earnings, as net earnings can be skewed by the paper gains or losses from investments.

Arguably the biggest callout from the letter was Berkshire Hathaway's impressive cash and short-term investments position, which soared to $167.6B.

Buffett pointed out the challenge of finding investment opportunities that can move the needle at Berkshire, candidly noting that he doesn't expect "eye-popping" performance in the future due to this limitation.

🏋️ Nasdaq’s Big 7

The top 7 holdings in the Nasdaq-100 index now account for a whopping 42.17% of the index.

This highlights a growing concern among investors: while indices are favored for their broad diversification, they've become increasingly top-heavy.

In response to high levels of concentration, the Nasdaq underwent a ”special rebalance” last summer aimed at reducing the dominance of its heaviest hitters.

This rebalance is triggered when the collective weight of any holdings exceeding a 4.5% index share crosses the 48% threshold, aiming to dial it back to 40%.

An interesting note from today's index composition is that all of the top 7 holdings belong to the 'Magnificent 7,' except for Broadcom.

Broadcom's recent performance has propelled it past Tesla, shaking up the usual lineup.

💬 Reddit’s IPO Is Here

Reddit is gearing up to be one of the most anticipated IPOs this year.

The company recently filed their S-1 to go public with the SEC.

Known as one of the world's most popular websites, it boasts over 100K+ active communities and averages 267M weekly active uniques.

The platform took initial steps toward going public by filing confidentially for an IPO back in 2021.

Recently, Reddit was advised to lower its target valuation to $5B, a significant drop from the $10B valuation it secured during a fundraising round in 2021.

If Reddit goes public, it will be the first social media platform to do so since Pinterest in 2019.

In an interesting move, Reddit plans to allow its community moderators to participate in the IPO.

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🆘 AT&T Outage. Thousands of AT&T users faced a cellular outage that lasted several hours - CNBC

🪫 Out of Battery. Both Lucid $LCID and Rivian’s $RVIN production guidance was far below analyst estimates - MW

🍕 Pizza Profit. Domino’s Pizza $DPZ beat profit estimates, raised dividend by 25%, and increased its stock repurchase program by $1B - WSJ

Notable Companies Reporting Earnings This Week:

  • Monday (2/26):

    • Workday $WDAY, Oneok $OKE, Zoom $ZM, Domino’s $DPZ

  • Tuesday (2/27):

    • Lowe’s $LOW, American Tower $AMT

  • Wednesday (2/28):

    • Salesforce $CRM, Snowflake $SNOW

  • Thursday (2/29):

    • Anheuser-Busch $BUD, Autodesk $ADSK

  • Friday (3/1):

    • RadNet $RDNT

All of the companies that are reporting earnings this week can be viewed here.

Major Trades Published Since 2/20. Trades may be those of family members. Buys and sells may be options trades. [Source: 2iQ]

Buys:

  • Michael McCaul (R)

    • Company: JPMorgan Chase ($JPM)

      • Amount Purchased: $2M - $4M

    • Company: Bayer ($BAYRY)

      • Amount Purchased: $200K - $500K

    • Company: AMD ($AMD)

      • Amount Purchased: $100K - $200K

  • Nancy Pelosi (D)

    • Company: Palo Alto Networks ($PANW)

      • Amount Purchased: $500K - $1M

      • Description: 50 Call Options; Strike Price $200; Expires 1/17/2025

    • Company: Palo Alto Networks ($PANW)

      • Amount Purchased: $100K - $250K

      • Description: 20 Call Options; Strike Price $200; Expires 1/17/2025

Sells:

  • Michael McCaul (R)

    • Company: JPMorgan Chase ($JPM)

      • Amount Sold: $2M - $4M

    • Company: SPDR S&P 500 ETF ($SPY)

      • Amount Sold: $200K - $500K

    • Company: Vanguard S&P 500 ETF ($VOO)

      • Amount Sold: $150K - $350K

  • Shri Thanedar (D)

    • Crypto: Bitcoin ($BTC)

      • Amount Sold: $250K - $500K

    • Crypto: Ethereum ($ETH)

      • Amount Sold: $100K - $250K

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