Berkshire Hathaway loses nearly $ 50 billion after stock price crash

Warren Buffett’s Berkshire Hathaway Inc posted a record net loss of nearly $ 50 billion on Saturday, in the wake of the coronavirus pandemic hit on its investments in common stock. Of course, operating profit increased despite COVID-19 damage to its businesses.

Berkshire’s first-quarter net loss totaled $ 49.75 billion, or $ 30.653 per Class A share, reflecting $ 54.52 billion in investment losses, primarily ordinary shares.

A year earlier, net earnings totaled $ 21.66 billion, or $ 13,209 per share.

Quarterly operating profit, which Buffett considers a better performance measure, increased 6% to $ 5.87 billion, or about $ 3,624 per Class A share, to $ 5.56 billion, or about $ 3,388 per share.

An accounting rule requires Berkshire to report profit and loss on unrealized stock with profit. This causes major changes in Berkshire’s net results that Buffett considers to be pointless.

However, Berkshire has been loaded with shares in part due to Buffett’s inability to find large companies to buy directly from, a drought that has lasted more than four years and left Berkshire with around $ 137.3 billion in cash.

The Standard & Poor’s 500 fell 20% in the first quarter, but there were steeper declines in several large Berkshire investments, including American Express, Bank of America, Wells Fargo and four airlines: American, Delta, Southwest and United.