🎉 Reddit's IPO Has Arrived

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

Author

Carbon Finance
February 27, 2024

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!

Not subscribed yet? Sign up today!

💰 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.

The Rollup is the best place to find investing and finance articles from outside the mainstream media.

Sign up for free to get a 2x weekly newsletter with all the stories that you won't find anywhere else.

Read it for free by automatically subscribing here.

🆘 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

How was today's newsletter?

We value all of feedback we receive. Let us know how we did so we can continue to make this the best investing newsletter available!

Login or Subscribe to participate in polls.

🤝 Review of the Week

Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author.

Carbon Finance is a publisher of financial information, not an investment or financial advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.

The information contained on this website/newsletter has been crafted with the assistance of an AI language model to enhance the content of this newsletter. We have made efforts to ensure the quality and reliability of the information presented, but we cannot guarantee its absolute accuracy. Therefore, readers are advised to exercise their own judgment and seek additional sources if necessary.

THE INFORMATION CONTAINED ON THIS WEBSITE/NEWSLETTER IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

The publisher, its affiliates, and clients of the publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

The views and opinions expressed in this newsletter are solely those of Carbon Finance and do not reflect the official policy or position of any other agency, organization, employer or company.

The mention of The Roll Up in our newsletter is provided as a courtesy to our readers and should not be construed as an endorsement of any product, service, or information provided by the sponsor or partner. Carbon Finance makes no representations or warranties, express or implied, about the accuracy, completeness, reliability, or suitability of the information contained in the sponsor’s or partner’s materials or any related services. Any reliance you place on such information is strictly at your own risk. We are not liable for any loss or damage arising from your engagement with The Roll Up or their content.

By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer.

Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.