Buffett’s big stake in IBM gets smaller
Billionaire investor says he doesn’t value ‘Big Blue’ like he used to
Warren Buffett’s big bet on IBM got a lot smaller this year.
The billionaire investor and chairman of Berkshire Hathaway told CNBC he cut his position in the U.S. tech company known as Big Blue by roughly one-third. At the end of 2016, Buffett’s stake in IBM totaled more than 81 million shares and was valued at $13.5 billion.
The Buffett bombshell on IBM comes ahead of Berkshire’s annual shareholder meeting, dubbed the Woodstock of Capitalism, on Saturday in Buffett’s home town of Omaha.
Buffett, who began building a position in IBM in 2011, said he started selling shares in this year’s first quarter when the stock jumped above $180 per share and hit a 52-week high of $182.79. In explaining his sale of IBM, which is trying to reinvent itself as a tech company focused on technologies such as cloud computing, Buffett told CNBC: “I don’t value IBM the same way I did six years ago when I started buying it,” adding he has “revalued it somewhat downward.”
IBM’s earnings performance disappointed Buffett, who noted the company’s annual pretax earnings have declined from roughly $20 billion when he first bought shares to about $13 billion today.
Buffett’s portfolio moves are closely watched by Wall Street, which refers to the billionaire investor as “The Oracle of Omaha” to reflect his long record of successful investments. IBM shares fell $4, or 2.5%, to close at $155.05 on Friday as investors reacted negatively to Buffett’s sale of roughly 25 million shares. In 2011, when Buffett first bought shares, the stock traded in a range of $160 to $190 per share.