Published: Sat, May 06, 2017
Sci-tech | By Jackie Newman

Warren Buffett in unusual position after 27 percent profit drop


Berkshire still owns more than 50 million shares in IBM, but Buffett said he had stopped selling.

Warren Buffet said, "I don't value IBM the same way that I did 6 years ago when I started buying".

Warren Buffett, IBM's largest shareholder, has dumped about a third of his stock in the blue-chip tech company.

Investors are likely to ask Buffett and Berkshire Vice Chairman Charles Munger about those holdings during the all-day, question-and-answer session with the executives on Saturday. The technology firm's shares closed at $159.05 in NY on 4 May.

Buffett said that in looking back at how IBM thought their business would develop, "what they've run into is some pretty tough competitors".

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Armonk, N.Y. -based IBM said last month that its revenue fell for the 20th consecutive quarter in the first three months of the year. That adjustment is likely to "significantly increase claim costs associated with now unsettled cases, as well as for future cases", the company said in a regulatory filing. Vetr upgraded Berkshire Hathaway from a hold rating to a buy rating and set a $180.00 price objective on the stock in a research report on Thursday, February 16th. Buffett's investing lieutenants Todd Combs and Ted Weschler, who together recently managed $21 billion, may take over as chief investment officer.

Berkshire shares have increased slightly more than 2 percent since the beginning of the year. A day earlier, Buffett had already pricked up ears by announcing on CNBC that Berkshire had cut its IBM stake by almost a third. Speculation about future targets has ranged from insurers and other financial institutions to industrial companies of every kind, but for now, Buffett doesn't seem in a hurry to move forward.

Buffett's stake in "Big Blue" represented a multi-billion dollar loss throughout 2015 and 2016 and was briefly positive in 2017.

The share price of the company (NYSE:BRK-A) was down -0.18% during the last trading session, with a high of 252000.00 and the volume of Berkshire Hathaway shares traded was 286.

Berkshire Hathaway Energy, a utility unit mostly owned by Berkshire, saw profit rise 14 percent to $501 million, helped by lower pension and maintenance costs at the PacifiCorp electric utility and a better rate structure for natural gas pipeline operator Kern River.

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