Warren Buffett’s investment firm Berkshire Hathaway sold more than $800 million of Apple stock in the last quarter of 2019.
Buffett is probably Apple’s most famous investor and cheerleader. Berkshire Hathaway is the Cupertino tech giant’s biggest shareholder, with an estimated 5.4% stake in the company.
Apple enjoyed a particularly great year on the stock market in 2019. In the past year, Apple shares have risen some 90%. Berkshire Hathaway’s SEC filing doesn’t reveal when it sold its 3.7 million shares. However, it could have earned anywhere from $806 million to $1.1 billion depending on when this transaction was carried out. The firm’s total share in Apple is worth around $72 billion.
Buffett’s firm has given no explanation for why it sold the Apple holdings. But given that Apple makes up close to 30% if its portfolio, it may simply have wanted to diversify its holdings a bit more.
Warren Buffett: Apple’s favorite investor?
Buffett’s support of Apple has arguably helped Apple a whole lot in recent years. By holding on to Apple stock even when it has experienced setbacks, Apple has benefitted from the so-called “Warren Buffett effect.” This effect has historically convinced other shareholders to stick around when they would normally be getting jumpy.
Buffett has frequently sung Apple’s praises in public. Buffett’s investment genius — and apparent Apple fandom — has even been homaged in an iPhone game, titled Warren Buffett’s Paper Wizard. Unlike activist investors like Carl Icahn, Buffett has also never tried to lean on Apple to make changes. Instead, he’s played the long game and waited for Apple stock to reward him. Which is exactly what’s happened in recent years as it has gone from strength to strength.
In the last year, however, Berkshire Hathaway hasn’t invested new funds in Apple quite as much as it has previously. “If it were cheaper, we’d be buying it. We aren’t buying it here,” Buffett told CNBC this time last year. At the time, Apple was trading at $172.97. Today, by comparison, it is valued at $324.95.
Via: Business Insider