Berkshire Hathaway takes stakes in four major airlines
15 November 2016
Berkshire Hathaway's just released SEC filings show that the company had taken a stake in three of the four major airline companies - American Airlines, United Continental Holdings and Delta Air Lines.
However, in an exclusive report CNBC said that Berkshire had also taken a stake in the fourth major carrier, Southwest Airline.
According to commentators the move into airlines comes as rather unexpected investment by Warren Buffett, who had kept away from the industry for decades after the investment he made in US Airways back in 1989 almost immediately dropped in value.
By 1995, Berkshire had written down the original $389 million investment to $89.5 million, just 25 cents on the dollar from the original amount. Buffett did make money on the deal in the end, but the experience was enough to sour him on the entire airline industry, something he had frequently written about in his annual letters to shareholders.
Meanwhile, Buffett had almost completely divested his Walmart stake.
After cutting down some of his stake in the retailer earlier this year, Buffett unloaded Walmart stock by nearly 70 per cent as the discount store announced its controversial deal to buy e-commerce startup Jet.com. Buffett's stake in the retailer is now below $1 billion, down from nearly $3 billion in the middle of this year, according to new securities filings.
Walmart stock is now 15 per cent up so far in 2016, but it had begun to falter, with the shares down slightly during the third quarter when Buffett reduced his stake. The stock dropped nearly 5 per cent in the last three months. The legendary investor had started paring down his Walmart holding a year earlier, when the retail giant lowered its earnings forecast.