- Warren Buffett may have bought back more than $ 5 billion in Berkshire Hathaway stock in recent weeks.
- The famous investor revealed his Berkshire stake in an application last week, which indicates that the number of shares outstanding fell by about 1.2% between April 23 and July 7.
- “It means relatively strong repurchase activity,” Edward Jones & Co analyst James Shanahan told Reuters.
- Buffett may have spent between $ 4.9 billion and $ 5.9 billion on repurchases during the period, or triple about the $ 1
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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 attempt to capitalize on his company’s huge cash reserves and depressed stock price.
The famous investor and Berkshire CEO owns 248,734 of his company’s A shares and 10,188 of his B shares after donating about $ 2.9 billion in Berkshire shares to charity last week, according to an SEC filing.
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Each A share can be converted into 1,500 B shares. Therefore, Buffett held the equivalent of 248,741 Series A shares at the last number.
The filing showed that Buffett’s holding represents 15.54% of Berkshire’s total outstanding shares, which corresponds to just over 1.6 million Class A shares.
The total number of A and B shares outstanding on April 23 corresponded to 1.62 million A shares, Berkshire said in its last quarterly registration.
Therefore, it appears that Berkshire’s outstanding share calculation decreased by the corresponding 19,400 class A shares or 1.2% between April 23 and July 7.
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Assuming it reflects share repurchases, Buffett probably spent between $ 4.9 billion and $ 5.9 billion to buy them, based on the offer of Berkshire’s share price during that period.
“It means relatively strong repurchase activity,” Edward Jones & Co analyst James Shanahan told Reuters. He suggested that Berkshire may have repurchased $ 5.3 billion in stock, based on the average share price during the period.
If true, that would mean Buffett more than tripled his repurchases compared to the $ 1.7 billion stock he repurchased during the first quarter.
Buffett, who has been trumpeting the value of repurchases for several years, may have decided to spend some of Berkshire’s $ 137 billion cash on his company’s shares because they are relatively cheap.
Berkshire shares have fallen by about 20% this year, compared to the S&P 500’s about 2% decline. Berkshire’s market value is also less than 1.2 times its net assets.
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At the same time, Berkshire shareholders may have sold their stock to Buffett as they are frustrated by its underperformance this year.
“Berkshire’s oldest quality shareholder does not sell, so we see a voluntary clearing of lower-quality short-term shareholders,” Lawrence Cunningham, a law professor at George Washington University and author of several books on Buffett, told Reuters.