Investor extraordinary Warren Buffett has said that he has sold of almost a third of his firm Berkshire Hathaway’s massive stakes in IBM. The news comes from CNBC, and manages to take many unawares. IBM after all is a huge entity, and would have been deemed a a successful investment by most. Why then, is Buffett offloading stakes in the company?
In February, the value of IBM stock reached a high of $182.78. Buffett owned around 81 million shares of IBM near the end of 2016. He sold about third of them in the first two quarters of 2017. I can hear the wheels and gears in your heads turning — that is a lot of money. Buffett also appears to have revalued the tech behemoths somewhat and that too, downwards.
I don’t value IBM the same way that I did six years ago when I started buying … I’ve revalued it somewhat downward.
Which is interesting. Buffett is famous for not investing in companies that he finds difficult to understand. Indeed, that is one reason why Berkshire underweights companies in the tech sector. However, he crossed his own inhibitions a few years ago and picked up a lot of stocks in IBM.
This was not the only tech company he pocked up stocks in though and Berkshire also has investments in American Express , Coca-Cola, Wells Fargo, Apple and Kraft Heinz. Indeed, the Apple investment was fairly recent — another sign of Buffett making what could have been a tough decision. Berkshire Hathaways also has stakes in dozens of other small and big companies across the world.
Meanwhile, the IBM sell out has left Berkshire with around 50 million shares of the company. Prices range in the neighborhood of $150 and the investment firm has stopped selling off any further shares for now.