Friday , April 16 2021

Warren Buffett is considering $ 100 billion in Berkshire for repurchase




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Warren Buffett said this week that his company, Berkshire Hathaway, could use his huge cash deposit to buy up to $ 100 billion worth of shares, about a hundred times the amount he spent on redemption last year.

Warren Buffett is president and chief executive of Berkshire Hathaway Inc. and the third richest man in the world. Photographer: Andrew Harer / Bloomberg

& copy; 2018 Bloomberg Finance LP

In a statement to the Financial Times, Buffett said he faces a shortage of investment companies, but said he still rejected the idea of ​​using some of his money to pay dividends to shareholders. Investors also voted against dividend payment in 2014.

Berkshire completed the quarter with $ 112 billion in cash and cash equivalents on its balance sheet. The mountain is near a record high, but was higher at the end of 2018, when the company announced it had $ 116 billion in cash.

Buffett is unlikely to make a $ 100 billion ransom in the near future, as his former long-term repurchase policy has prevented repurchase participation from cutting the balance sheet to $ 20 billion. The price should also be right.

"The only way Buffett will cope with the downsizing of a large stock of equity is to buy stocks when they are sold at a price that they think is lower than their real value," the Financial Times reported. "This is, in his opinion, to buy a partner at an attractive price."

Berkshire Hathaway B-class stocks traded at $ 214.22 Friday, which is 4.51% for the year, versus a 16.74% rise in the S & P 500. The last time a $ 900m stock return was announced in the third quarter of 2018, when the price was $ 205 per share.

Buffett made these acquisitions after the Berkshire board eased the restrictions on the redemption policy. Under the new rule, Buffett or vice president& nbsp;Charlie Munger & nbsp; could buy back stocks when they consider their price "under the congenital value of Berkshire", using a "conservative" estimate. Earlier, the company allowed redemption only when the stock price fell below 1.2 times book value per share.

Although Buffett has long supported the idea of ​​buy-out of shares, he rarely performed for his company when more attractive targeted businesses were offered to buy them in full. He spent $ 1.2 billion on Berkshire shares in December 2012, when he expanded the range to 1.2 times the book value of 1.1 times and did not disclose any other deals before.

Buffett, who has to spend large sums of money to make a profit for his gigantic company, did not announce the acquisition of the entire company after he bought the precise caspas for $ 37.2 billion in January 2016. He and his two portfolio managers, Ted Wesler and Todd Combs, continued to disclose publicly-traded buy-outs. They bought three positions in the fourth quarter – Red Hat Inc., Suncor Energy Inc. and StoneCo Ltd. – but the amounts were relatively small, with less than one billion dollars. His share in Apple was also about $ 40 billion.

But when Berkshire's actions get to the place where Buffett thinks he should be and the other actions are expensive, he will face the real puzzle. "It's my nightmare," he told The Financial Times.

This article originally appeared HERE.

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Warren Buffett said this week that his company, Berkshire Hathaway, could use his vast cash warehouse to buy up to $ 100 billion of its stock, which is about a hundred times the amount it spent on redemption last year.

Warren Buffett is president and chief executive of Berkshire Hathaway Inc. and the third richest man in the world. Photographer: Andrew Harer / Bloomberg

© 2018 Bloomberg Finance LP

In a statement to the Financial Times, Buffett said he faces a shortage of investment companies, but said he still rejected the idea of ​​using some of his money to pay dividends to shareholders. Investors also voted against dividend payment in 2014.

Berkshire completed the quarter with $ 112 billion in cash and cash equivalents on its balance sheet. The mountain is near a record high, but was higher at the end of 2018, when the company announced it had $ 116 billion in cash.

Buffett is unlikely to make a $ 100 billion ransom in the near future, as his former long-term repurchase policy has prevented repurchase participation from cutting the balance sheet to $ 20 billion. The price should also be right.

"The only way Buffett will cope with the downsizing of a large stock of equity is to buy stocks when they are sold at a price that they think is lower than their real value," the Financial Times reported. "This is, in his opinion, to buy a partner at an attractive price."

Berkshire Hathaway B-class stocks traded at $ 214.22 Friday, which is 4.51% for the year, versus a 16.74% increase in the S & P 500 index. The last time a stock return of $ 900 million was announced in the third quarter of 2018, when the price was 205 dollars per share.

Buffett made these acquisitions after the Berkshire board eased the restrictions on the redemption policy. Under the new rule, Buffett or vice president Charlie Munger can buy back stocks when they consider their price "under the congenital value of Berkshire", using a "conservative" estimate. Earlier, the company allowed redemption only when the stock price fell below 1.2 times book value per share.

Although Buffett has long supported the idea of ​​buy-out of shares, he rarely performed for his company when more attractive targeted businesses were offered to buy them in full. He spent $ 1.2 billion on Berkshire shares in December 2012, when he expanded the range to 1.2 times the book value of 1.1 times and did not disclose any other deals before.

Buffett, who has to spend large sums of money to make a profit for his gigantic company, did not announce the acquisition of the entire company after he bought the precise caspas for $ 37.2 billion in January 2016. He and his two portfolio managers, Ted Wesler and Todd Combs, continued to disclose publicly-traded buy-outs. They bought three positions in the fourth quarter – Red Hat Inc., Suncor Energy Inc. and StoneCo Ltd. – but the amounts were relatively small, with less than one billion dollars. His share in Apple was also about $ 40 billion.

But when Berkshire's actions get to the place where Buffett thinks he should be and the other actions are expensive, he will face the real puzzle. "It's my nightmare," he told The Financial Times.

This article originally appeared HERE.


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