Biden Capital gains tax
Word on the street is Joe Biden will soon propose a new tax plan to increase capital gains taxes for wealthy people making over $1 million. The plan, if included in the income bracket, would raise the capital gains tax from 20% to 39.6%. Add an existing surtax on investment income and you’re looking at 43.4% capital gains taxes.
For those that don’t know, capital gains taxes are paid once you sell assets, like your stocks.
This new tax could discourage investors from selling assets, which is seen as keeping the markets healthy. Be prepared to see a lot of investors selling their assets in 2021 to prepare for the incoming new tax.
This should come as no surprise for investors as this was in Biden’s tax plan, but it still shocked the market on Thursday, dropping stock prices down significantly.
Netflix Quarter 1 Earnings Underperforms
Netflix shares fells around 11% afterhours on Monday after their report indicated a miss in subscriber numbers. Their expectations were set to 6.2 million new subscribers, but only reached 3.98 million.
The ongoing pandemic was to blame for this decline in expectations, but it was enough to scare off stakeholders, resulting in a drastic decline in their stock price. Production delays and a lighter new content release were mainly to blame.
Another factor could be with the economy beginning to open, less people are stuck indoors with nothing to do but watch Netflix.
With that said, Netflix did report positive revenue growth in the first Quarter. $7.16 billion vs the expected $7.13 billion. They are still on track to meet their goal of an annual revenue growth of 24% we see year over year.
Discord Ends Deal Talks With Microsoft
It was reported that Microsoft had been in talks with Discord over a possible $10 billion acquisition deal.
After Microsoft failed to buy TikTok earlier this year, their pockets were full of cash looking for their next deal. But apparently Discord will not be that purchase.
They have decided to remain a private company and will consider a public offering in the near future.
Amazon Takes Over The World
Jeff Bezos sent out his last shareholder letter as CEO, but the company has not slowed down in the slightest. They have new product launches happening that will branch themselves out into several other industries.
Amazon announced on Wednesday they were opening a hair salon in London. This salon will feature new augmented reality technology that will show you how’d you look with different hair colors.
The second announcement was that of their planned launch of a new furniture assembly service. This is reportedly being launched in Virginia as a way to compete with Wayfair. Customers would be able to hire contractors to assemble furniture.
Last but not least, Amazon had already implemented new contactless paying technology to avoid waiting in checkout lines, but it will now be expanding to 7 Whole Foods locations in Seattle.
SPAC Deals Declining
In March 2021, SPAC deals reached a scary new high of 109 new listings. In April, it came to a screeching halt with only 10 SPACs.
This came after the SEC issued accounting guidance which lists SPAC warrants as liabilities instead of equity instruments. If this law gets passed, all deals currently in the pipeline would be required to go back and recalculate their finances each quarter.
This could take away the incentive for investors and sponsors to opt for this alternative IPO path. It was renown for being a fast vehicle to going public with low level of inspection. As a cherry on top, more than 90% of SPACs had been audited by 2 accounting firms over the past 6 years. This could result in a further backlog as SPACs are struggling with their new accounting rules.
