WSJ What’s News - Why Businesses Are Selling Their Tariff Refund Claims to Wall Street

Episode Date: February 25, 2026

P.M. Edition for Feb. 25. Businesses are still figuring out whether they’ll get tariff refunds after last week’s Supreme Court decision. But some aren’t waiting for an answer; WSJ reporter Caitlin McCabe discusses how they’re selling their tariff refund claims to Wall Street traders. Plus, four people on a U.S.-registered speedboat were shot and killed after exchanging fire with Cuba's border guard. And prediction-market platform Kalshi has fined two users for breaking its rules. While it’s the first time the company has done so publicly, Journal reporter Krystal Hur says it likely won’t be the last. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Four people on a U.S. registered speedboat are shot and killed after being intercepted in Cuban waters. Plus, while businesses wait to see if they get tariff refunds, Wall Street is buying up those claims now. Companies that paid millions and millions of dollars in tariffs are facing this crucial decision right now. Do they want to potentially wait years for this refund process to play out? or do they want to strike a deal with an investment firm that's willing to give them a fraction of their money today? And prediction market platform Kalshi has fined two users for breaking its rules. It's Wednesday, February 25th. I'm Alex O'Sleaf for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. This just in, four people were shot and killed in San Francisco. others were injured this morning on a U.S. registered speedboat after being intercepted in Cuban waters. That's according to Cuba's Interior Ministry, which also said that the vessel, which was registered in Florida, opened fire on the island's border patrol when they approached the boat on Cuba's north-central coast. As of this afternoon, the identities or nationalities of the individuals on the boat weren't disclosed. The U.S. State Department didn't immediately return a request for comment, while Cuba's Interior Ministry said that authorities are investigating the incident.

The deadly clash comes as the Trump-Infews, administration has sought to choke off fuel shipments to Cuba in recent weeks. In fact, today the Trump administration announced that it is loosening some restrictions on fuel shipments to the country amid a growing humanitarian crisis. The U.S. Treasury today said that it would allow the resale of Venezuelan oil to private companies in Cuba, though sales to the government in Havana are still illegal. It also said that some shipments of American fuel would be allowed for a handful of U.S. companies. As we reported earlier this week, the chaos over President Trump's tariffs is sending business leaders scrambling to sort out what may come next. But some on Wall Street are

seeing an opportunity. Investment firms are buying companies' rights to any refunds they might be due. I'm joined now by WSJ Markets reporter, Caitlin McAve. Katelyn, let's start with the basics here. Why would a company sell its right to tariff refunds? So what we're seeing is sort of the latest iteration of this kind of fun and esoteric corner of finance where essentially investment firms will buy the rights to money. that another party is owed. Companies that paid millions and millions of dollars in tariffs are facing this crucial decision right now. Do they want to potentially wait years for this refund process to play out after the Supreme Court decision that we got last week? Or do they want to strike a deal

with an investment firm that's willing to give them a fraction of their money today? Okay, that makes sense from a company perspective, but how do investment firms stand to make money here. So basically what they're doing is they're paying pennies on the dollar today in hopes that they will make a full dollar, if not more, down the line. And I think that's the big question right now is how will this process play out? In its ruling, the Supreme Court didn't weigh in on whether the government would have to pay refunds on the tariffs, but essentially they're betting. We think that this is going to happen. We think that companies will get refunds. And so we'll just pay a fraction of that today in hopes of a bigger payout down the line. And so even months ago, we saw investment firms

buying up these claims. They were trading in the teens got as high as around 20 to 22 cents based on what I was hearing. And then when the Supreme Court decision came out last Friday, that nearly doubled from what I'm hearing in the market. Now these claims are trading around 40-ish cents on the dollar. And effectively, that means that investment firms have to pay a whole lot more because there's a little bit more certainty here? That's what they're wagering. Again, none of this is guaranteed, but they're thinking, you know, if this market continues to go in this direction, better to lock in 40 cents rather than 50 or 60 or even higher. There's also a chance some companies are speculating that they might be paid interest on the tariffs that they paid. So there is a world where potentially investment firms

could make that dollar back, plus any interest on top of it. That was WSJ Markets reporter, Caitlin McCabe. Thanks, Caitlin. Thanks for having me. And we're exclusively reporting that the Trump administration told Congress it won't share the classified intelligence that led to a whistleblower complaint against U.S. spy chief Tulsi Gabbard. In an email to Democratic congressional staffers sent earlier this month, Gabbard's office said it was unable to provide the unredacted intelligence that underpin the complaint because of presidential claims of executive privilege. Yesterday, two top Democrats on the Congressional Intelligence Committees

sent a letter to Gabbard asking who asserted privilege over the intelligence report and on what basis. The journal has reported that the intelligence relates to a conversation two foreign nationals had about Donald Trump's son-in-law, Jared Kushner. Coming up, what's got investors feeling chipper? That's after the break. Circle, the issuer of the world's second largest state. said today its fourth quarter profit jumped as crypto investors continued to flock to its stable coin. Its total revenue also surged 77% to $770 million in spite of the meltdown in

crypto prices at the end of last year. Vicky Gaghuang covers cryptocurrency for the journal and is here to break it down. Vicki, why are the biggest stablecoins doing well when other cryptocurrencies like Bitcoin have tanked? So when the crypto market gets really volatile and Bitcoin prices and major token prices are tanking or going up and down. It's actually somewhat positive for stable coins because that's when investors sell their cryptocurrencies and park them in stable coins. But this doesn't extend to every single player in the stable coin space. Usually it's the largest players like Circle and Tether that have already established their foothold in the market that sort of weather these storms somewhat unharmed.

Circle went public in June last year, and it had this big stock market debut, but since then, shares have fallen almost 70%. Today, though, its stock rose 35%. Is this a sign of a turnaround potentially for its stock price? So Circle went public last year, and their IPO was really a blockbuster debut, and the stock soon reached a peak after the president signing to law, the first stable coin bill, which really helped establish a regulatory framework for the stable coin space. However, stable coins, even though they are stable and pegged to the dollar, they are still mainly used by crypto traders to trade in crypto. So they are not together with a broader crypto space.

Circus performance today, it may be because the company said how they are trying to expand beyond just using stable coin as a trading tool, but also for cross-border payments and e-commerce. They're also trying to diversify into FX business or launching their own blockchain or sending up their own payments network. Their performance sort of decoupled from the broader crypto market and they could be on the path to a turnaround if they're able to diversify their revenue streams and broaden their business beyond relying on interest income.

that comes from the reserves that back their stable coin. That was WSJ reporter, Vicki Gougham. Thanks, Vicki. Thank you for having me. U.S. stocks rose today. AI-related names and software stocks continued to bounce back from Monday's sell-off. NVIDIA stock gained 1.4% ahead of its earnings after the close, which helped push the NASDAQ 1.3% higher on the day.

The S&P 500 and the Dow were up less than 1%. And reporting after the bell. NVIDIA reported record sales and income in the January quarter, helping ease concerns over a possible artificial intelligence bubble that have rippled through markets in recent months. The chip giant reported fourth quarter net income of $43 billion, up 35% from the year earlier quarter, on sales of $68.1 billion, up 20% from a year earlier, easily beating analyst estimates. Paramount's streaming revenue grew in the fourth quarter, but the company reported weakness in its TV media sales. segment. The company reported revenue of $8.15 billion for its fourth quarter in line with analyst estimates. And Salesforce expects revenue to grow in the current fiscal year at about the same rate as it did the year before, as investors worry about AI's threat to software. Revenue in its

most recent quarter rose 12 percent to $11.2 billion in line with analyst expectations. For more on these results, visit WSJ.com. Prediction Market Platform Kalshi said today that it's fined two users for violating its rules. One person who ran for governor in California was fined more than $2,000, which includes the amount related to his trades and penalties, while another was asked to pay more than $20,000. Cal She said this was the first time it's publicly disclosed disciplinary actions against users

and comes as the proliferation of prediction markets has raised concerns about users making trades using inside information and manipulating markets. For more, I'm joined now by journal reporter Crystal Hur. Crystal, how did Kalshi catch these two users? So for the case of the trader who bet on his own victory in the race for the California governor, he actually posted a video that seemingly showed him making that bet on X. So it sounds like the surveillance department saw that video,

froze his account and investigated and then found that his trades violated Kelshi's rules. And then the second case with the video editor who worked for Mr. Beast, it looks like the data show that he was getting some pretty successful trades on a market where that is pretty difficult and that not only raised the concerns of people at Kalshi who work on that same team, but also of Kalshi users who flagged it to Kalshi. So in both cases, it was the work of the surveillance department and in the second case of the Kalshi users as well. What rules did the users violate exactly? Yeah, so in the case of the political wagers, Kalshi prohibits.

candidates in a political race for making bets and markets related to their own elections, as well as those employed by political action committees. And if you look at the LinkedIn page of Kyle Langford, who is the trader who was faced with these fines, it says that he is the president of a California-based pack. And for the second user, he was privy to information that is not public to other people. And so he should not have any trading on markets related to Mr. Beast. according to Kalshi's rules. And we should note that a spokesperson for the company that oversees Mr. Beast's business ventures

said the firm prohibits its employees from making prediction market wagers using proprietary company information, and it declined to comment on whether the employee still works there. Crystal, as I mentioned, this is the first time that Kalshi has publicly made it known that it's taken disciplinary action against users. Should we expect to see more of this? It seems like that is likely that it will happen. These prediction markets are only becoming more popular, and there's a lot of concerns about insider trading and market manipulation,

especially because these markets are geared towards everyday Americans. And Kelchie did announce just a couple of weeks ago, a lot of hires they had made to crack down on this sort of activity. That was journal reporter Crystal Hur. Thanks, Crystal. Thanks. And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Biennameh,

with supervising producer Jana Heron. I'm Alex Oslo for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. You know, I'm going to be. Thank you.