Buffett Admits to Selling 'Large Amount' of Shares in IBM

Cornelia Mascio
Mag 6, 2017

(IBM) fell after Buffett told CNBC in an interview Thursday that Berkshire had sold one-third of its stake in the computing giant. BRK.A, -0.18% BRK.B, -0.23% owned about 81 million shares of International Business Machines Corp.at the and of 2016, but has dumped about 30 million shares so far this year.

Tens of thousands of people gathered to hear Warren Buffett impart wisdom and answer questions at Berkshire Hathaway's annual shareholders meeting, which kicked off Saturday morning. Buffett said he doesn't think Berkshire will be selling any more shares.

Buffett may need to review Berkshire's support of Wells Fargo Co, in which it holds a roughly 10 per cent stake, despite a sales scandal over bogus customer accounts. IBM's stock touched $180 on February 14 and reached a high of $182.78 during February 16 trading.

In early Wall Street trade, IBM shares were down 2.5 percent at $154.00. An IBM representative didn't provide an immediate comment on the news. "I've revalued it somewhat downward", Buffett told CNBC.

"Watching someone like (Buffett) with strong command on details of the economy and Berkshire's operations is very impressive, ' said Meyer Shields, a Keefe, Bruyette Woods analyst who rates Berkshire 'market perform".

Berkshire first bought IBM in 2011.

Buffett and Berkshire's board oppose all three shareholder measures this year. Back in April, IBM reported earnings that showed its revenue has fallen for 20 quarters straight, now.

USA stocks opened mostly higher on Friday after the April headline jobs number surpassed expectations, though the details of the report were somewhat weaker than expected.

Mr. Buffett likes to say that his biggest mistakes are those of omission. This year its gain on investments and derivatives was $504 million. The news comes from CNBC, and manages to take many unawares. This creates a pretty tough competition for the server-focused company.

The IBM sale adds to Berkshire's growing cash pile.

When billionaire Warren Buffett toured the exhibit hall where Berkshire Hathaway companies are selling their products outside Berkshire's annual meeting, he was again surrounded by a pack of reporters, shareholders and security officers. Berkshire Hathaways also has stakes in dozens of other small and big companies across the world.

Still, the company's transition hasn't gone as quickly as may have been expected.

Last week, I detailed how legendary investor Warren Buffett was likely to be happy with IBM (NYSE:IBM) announcing its annual dividend raise.

-Ted Greenwald contributed to this article.

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