Warren Buffett, the owner of Berkshire Hathaway Inc. revealed on Monday (16 May 2016) a purchase of 9.81 million Apple shares, making the Omaha-based conglomerate its 56th largest shareholder. In addition to his investment the news itself bolstered the technology giant’s market value by more than $18 billion.
Berkshire’s holdings of Apple shares have dropped in value to $921 million as Apple shares have slid over the last year, with the shares seeing a 30 per cent decline over the past 12 months, and 14 per cent so far in 2016. Apple shares have since rebounded by $3.36 or $3.7 on Monday up to $93.88 in response to Berkshire’s stake.
Buffett has been known for keeping away from investments in technology. Buffet “has always prided himself on ‘I stick with what I know and I just don’t know tech,’” said Lawrence Cunningham, a research professor of law at George Washington University and the author of four books about Berkshire.
The Wall Street Journal revealed in its report that Buffett was not the one who made the investment himself, but it was his stock-picking team led by Todd Combs and Ted Weschler. Furthermore, based on analysis it was a buying opportunity for the Omaha-based conglomerate since Apple’s stock slumped over the past year because of its declining iPhone sales, which accounted for two-thirds of its revenues.
While Buffett stayed away from technology companies,Berkshire does own a stake in International Business Machines Corp. (IBM) valued at about $12 billion. Moreover, Buffett told CNBC on Monday that he is willing to help Dan Gilbert, the chairman of Quicken Loans, in financing a bid for Yahoo! Inc.
Buffett, 85, according to Forbes, is the second richest American with a net worth of $66 billion, only second to Microsoft Corp co-founder Bill Gates with a net worth of $75 billion.
Buffett’s wealth grew through Berkshire where he made long-term investments in financial, manufacturing, and retail companies, earning him the nickname, the “Oracle of Omaha.”In particular, he owns dozens of companies including Geico Insurance, Benjamin Moore paints, See’s candies, and Xtra Corp., which is a truck-leasing company. The multibillionaire business owner had major investments with American Express Co., Coca-Cola Co., and Wells Fargo and Co. His largest acquisition so far was Precision Castparts Corps. At $37 billion, including its 30 facilities and 5,000 employees in Southern California.