- Warren Buffett may have repurchased more than $ 5 billion in Berkshire Hathaway stock in recent weeks.
- The famous investor revealed its stake in Berkshire in a presentation last week, suggesting that the number of shares outstanding fell by about 1.2% between April 23 and July 7.
- “It involves relatively strong buyback activity,” Edward Jones & Co analyst James Shanahan told Reuters.
- Buffett could have spent between $ 4.9 billion and $ 5.9 billion on repurchases in the period, or roughly tripling the $ 1.7 billion he spent in the first quarter.
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Warren Buffett may have repurchased more than $ 5 billion in Berkshire Hathaway stock in recent weeks, triple the value of his first-quarter repurchases, in an effort to capitalize on his company’s huge cash reserves and low price. of actions.
The famous Berkshire investor and CEO owns 248,734 of his company’s Class A shares and 10,188 of his Class B shares after donating around $ 2.9 billion in Berkshire shares to charities last week, according to a document released by the SEC.
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Each Class A share can be converted into 1,500 Class B shares. Thus, Buffett had the equivalent of 248,741 Class A shares at the last count.
The filing showed that Buffett’s stake represents 15.54% of Berkshire’s total outstanding shares, equivalent to just over 1.6 million Class A shares.
The total number of Class A and Class B shares outstanding on April 23 was equivalent to 1.62 million Class A shares, Berkshire said in its latest quarterly presentation.
Therefore, it appears that Berkshire’s outstanding share count fell by the equivalent of 19,400 Class A shares or 1.2% between April 23 and July 7.
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Assuming that reflects the share buyback, Buffett likely spent between $ 4.9 billion and $ 5.9 billion to buy them, depending on the range of Berkshire’s Class A share price during that period.
“It involves relatively strong buyback activity,” Edward Jones & Co analyst James Shanahan told Reuters. He suggested that Berkshire may have repurchased $ 5.3 billion in shares, based on the average share price in the period.
If true, that would mean Buffett tripled his buybacks compared to the $ 1.7 billion in shares he repurchased in the first quarter.
Buffett, who has advertised the value of buybacks for years, may have decided to spend some of Berkshire’s $ 137 billion in cash on his company’s shares because they are relatively cheap.
Berkshire’s shares fell approximately 20% this year, compared with the S&P 500’s approximately 2% decline. Berkshire’s market capitalization is also less than 1.2 times its net worth.
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Meanwhile, Berkshire shareholders may have sold their shares to Buffett because they are frustrated with his underperformance this year.
“Berkshire’s stalwart quality shareholders do not sell, so we are seeing a voluntary purge of short-term, lower quality shareholders,” Lawrence Cunningham, a law professor at George Washington University and author of several books, told Reuters about Buffett.
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