Weekly Round Up 2/14/2022
Happy Valentines Day! Last week was another red week in the markets. As of 2/11, the S&P 500 is down 7.8% due to, most notably, rising COVID 19 infections, increased international tensions, and potential rising interest rates.
Market News
Tesla Reports that it’s Bitcoin holdings lost more than $100 million in value in Q4
Electric vehicle maker, Tesla (Nasdaq: $TSLA) reported about $101 million in impairment losses on Monday in their annual 10-k financial performance report. These losses are a result of the ever changing value of Bitcoin.
“We recorded approximately $101 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $128 million on certain sales of bitcoin by us,” Tesla said during their earnings call. Impairment losses happen when an asset has a decline in its carrying value.
In January of 2021, Tesla made its initial investment of $1.5 billion towards its Bitcoin holdings. In March, the company sold a portion of its Bitcoin holdings, resulting in $128 million in capital gains.
Bitcoin recorded a 60% increase in price in 2021, reaching a total market cap of almost $2 billion.
In a statement about Monday’s filing, Tesla outlined updates to their investment policy- giving themselves more flexibility to diversify their assets with goals to maximize their cash returns and maintain operating liquidity.
Tesla is not the only company to record impairment losses in their Bitcoin investments. In the fourth quarter of 2021, MicroStrategy, a business software company, recorded a $146 million loss in its Bitcoin holdings.
To date in 2022, Bitcoin has reported about a 7% decline in its value due to rising Federal Reserve interest rates, closing at $43,000 on Tuesday.
Article 2: Starbucks fires 7 workers in Memphis over unionization
Starbucks (NYSE: $SUBX) has fired 7 employees in its Memphis, Tennessee location after they expressed their involvement in unionizing efforts. Though the company denies that the firings were linked to the employees’ unionizing efforts, many skeptics of the company have made accusations that the company is against the growing labor movement at its locations across the United States.
The company argues that these firings were a result of violations to its security policy after employees allowed media outlets into the store with intentions to make their union efforts known to the public.
Starbucks argues that employees are allowed to speak freely about their unionizing efforts, but only in a fashion that does not violate its existing policies. A statement by the company’s corporate communications director details that the employees allowed unauthorized persons into private back-of-house areas. Another employee opened a safe when they were not authorized to do so.
Starbucks Workers United, the union assisting in organizing efforts, argues that these firings were not appropriate, accusing corporate leaders of ‘union busting’ and targeting those who were involved in unionizing efforts.
Former shift supervisor Nikki Taylor argued against these firings in a press release from the union- saying that she was fired for violating ‘policies’ she had never been made aware of.
Just two months ago, a café in Buffalo, New York, became the first location to unionize in the United States. Union organizers say there are more than 50 additional locations across the U.S. pursuing unionizing efforts. Going forward, skeptics plan to carefully watch and analyze corporate reactions to such efforts.
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