Warren Buffett’s successor is finally putting his nearly $400 billion cash pile to work
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It looks like Berkshire Hathaway is finally going to put Warren Buffett’s cash to work.
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It agreed to buy $10 billion worth of Alphabet stock the day after the $8.5 billion acquisition was announced.
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Under new CEO Greg Abel, Berkshire has resumed buybacks and increased spending on stocks.
Warren BuffetBerkshire Hathaway appears to be finally loosening the reins, with the legendary investor no longer calling the shots.
Berkshire, now managed by Greg AbelGoogle has agreed to buy $10 billion of Alphabet stock in a private placement, Google’s parent company said Monday.
Buffett’s holding company, which owns Geico. Dairy Queenand Precision Castparts will acquire $5 billion of Class A common stock for approximately $352 per share and $5 billion of Class C common stock for approximately $348 per share.
Both classes Alphabet The shares closed above $370 per share on Monday, meaning Berkshire is buying at a roughly 6% discount to market price.
The deal was announced a day after Berkshire announced an $8.5 billion deal to acquire Taylor Morrison Home Corporation, a publicly traded homebuilder and community developer.
Berkshire’s planned Alphabet acquisitions build on its massive investment in the search, advertising and AI titan, which said Monday it would raise another $70 billion from other sources.
Berkshire purchased approximately 18 million shares third quarter of last yearthen more than one tripled its holdings It reached nearly 58 million shares in the first three months of this year, and as of March 31, it had nearly $17 billion worth of shares.
Assuming Berkshire doesn’t change its position since then and maintains its recent deal with Alphabet, it stands to own more than $32 billion in shares. Big Tech stockThis makes it one of the largest holdings in Berkshire’s portfolio.
putting cash to work
Buffett, who ended its sixty-year run Bay, who became Berkshire’s CEO at the end of last year but remains chairman of the company, is a world-renowned bargain hunter.
But he had difficulty finding challenging ways The red-hot stock market, fierce competition for buyouts and Berkshire’s soaring stock prices have made even buybacks unattractive in recent years.
As a result, Berkshire’s cash, treasury bills and other liquid assets have nearly tripled in the past three years. It rose from about $130 billion at the end of 2022 to a record $380 billion at the end of March.
Berkshire has been under pressure to empty its war chest for years. But longtime shareholders like fund manager Tom Russo praised Buffett’s discipline and said the dry powder invaluable in the next crisis.
