June 11, 2023

DealBook: Buffett Amasses 5.5% Stake in I.B.M.

Warren Buffett, chief of Berkshire Hathaway.Charles Dharapak/Associated PressWarren E. Buffett runs Berkshire Hathaway.

Warren E. Buffett, the chairman and chief executive of Berkshire Hathaway, revealed on CNBC that his conglomerate had amassed 64 million shares of I.B.M, a stake of about 5.5 percent.

Berkshire now ranks among the largest shareholders in the company.

“They have laid out a road map, and I should have paid attention to it earlier,” Mr. Buffett said of the company on CNBC. Mr. Buffett, who indicated in the interview that he had not spoken with I.B.M. about his position, felt management had done “an incredible job.”

The $10.7 billion investment is unusual given Mr. Buffett’s long-stated aversion to technology stocks, particularly Internet stocks. Amid an Internet stock boom in 1998, he told Berkshire shareholders, “Technology is just something we don’t understand, so we don’t invest in it,” according to The Associated Press.

His letter to shareholders for 2000 boasted: “We have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint. Try to control your excitement.”

And while well known for his value investments, Mr. Buffett is buying I.B.M. at a premium price. The stock has been steadily rising all year, and is up more than 25 percent since January. At a recent $187 a share, I.B.M. currently trades near its record high.

Mr. Buffett said Berkshire had made other such plays in the past. He said the company bought control of Geico, the insurer, at its all-time high, and “bought railroads on the highs.” Berkshire Hathaway owns the Burlington Northern Santa Fe Corporation, which he acquired outright in 2009.

Related Links

The I.B.M. position will put Mr. Buffett neck and neck with State Street, the powerhouse Boston financial firm that also owns about 5.5 percent of the company’s outstanding shares, according to Bloomberg data.

The news comes as investment managers are set to release their third-quarter holdings. Though backward looking, these so-called 13F statements can cause market movements when closely watched investors like Mr. Buffett disclose their positions. Berkshire Hathaway is set to report its positions on Monday evening.

Article source: http://feeds.nytimes.com/click.phdo?i=80252f09397f2429b389415bca8040f3

Speak Your Mind