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Breakfast Briefing: Berkshire’s Tax Gain, Dropbox IPO & the E-Franc

Berkshire Gains $29bn

Warren Buffett’s Berkshire Hathaway benefited from Trump’s tax cuts to the tune of $29bn.

Editor’s Remarks: In his annual letter to shareholders, Buffett announced that changes to the US tax system had massively improved his company’s bottom line. He added that a “purchasing frenzy” had inflated asset prices to the extent that Berkshire deliberately avoided any big acquisitions in the last 12 months. Berkshire’s annual report also showed that the holding company had repatriated some of its foreign-held cash, which incurred $1.4bn in tax. Overall, the gain from the tax laws formed around 65% of the company’s total $44.9bn in net earnings last year; in other words, the tax cut tripled Berkshire’s profits.

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Dropbox Files for an IPO

The file-sharing company is preparing to list an offering worth $500m.

Editor’s Remarks: Dropbox, which was privately valued at $10bn during its 2014 funding round, announced its decision to launch an IPO over the weekend. The company said that the $500m offering is simply a placeholder sum that is likely to change. Regardless, cash raised will go towards paying down the company’s debt and general expansionary projects. The listing would mark one of the USA’s biggest domestic tech IPOs in recent years; the last major listing was First Data, which went public in 2015 at a $14bn valuation. The usual suspects – Goldman Sachs, JPMorgan and Deutsche Bank – are underwriting the deal.

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Walmart Struggles Against Amazon

18 months into a new online strategy, Walmart is still struggling to fight off Amazon.

Editor’s Remarks: 18 months ago, Walmart hired Marc Lore as CEO and tasked him with boosting the company’s online presence and arming the American retail giant against Amazon’s onslaught. However, Walmart’s results over the holiday period grew at just half the rate of previous quarters, which call into question whether Lore’s strategy is working at all. Rumours have spread that Lore’s exit is imminent – something he has publicly refuted. Furthermore, fears are again swirling that Walmart, with its two million employees and reliance on low-income shoppers, is able to keep up with its agile online rivals.

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Swiss Exchange Calls for E-Franc

The idea of a national Swiss cryptocurrency is gaining traction among Swiss business leaders.

Editor’s Remarks: Romeo Lacher, the chairman of the Swiss stock exchange, told journalists that “there would be a lot of upsides” to replacing cash with a digital currency. The move, he added, might also boost the local economy and ensure that Switzerland remains at the very forefront of technological innovation. However, central banks across the world are uneasy about the prospect of national cryptocurrencies, as the crypto markets are rife with speculation that causes prices to rocket in all directions. Nevertheless, as blockchain technology develops, central banks risk losing their monopolies to the so-called “wild west” of cryptocurrencies.

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LG’s AI Camera

The phone-maker has turned to third-party AI to power the AI in its latest cameras.

Editor’s Remarks: LG launched a partnership with EyeEm to include artificial intelligence (AI) capabilities to the camera in its V30 smartphone. The new V30S ThinQ can detect the subject of a picture, which prompts the camera to adjust itself to shoot the ideal photo. Although the software used to power the camera is run locally on the phone, LG turned to EyeEm, a Berlin-based startup that was founded in 2011, for the AI system. The company has so far raised $24m in funding and said that the system that LG is using can also be used by other smartphone companies.

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