IMPORTANT POINTS:
- Warren Buffett’s Berkshire Hathaway divested a portion of its HP holdings.
- The Oracle of Omaha sold 5.5 million shares of the computer and printer maker, worth an estimated $158 million.
- These sales were made on three different days. In any case, the conglomerate still owns $3 billion in HP.
Warren Buffett‘s Berkshire Hathaway decided to sell a large amount of shares in printer and computer maker HP, due to its financial instability.
The nonagenarian investor disposed of 5.5 million shares of the company, worth an estimated $158 million. In any case, the conglomerate still holds $3 billion in HP securities.
The technology company’s shares closed on Wednesday with a drop of 2%, while this Thursday they opened with a loss of almost 5% to trade at $27.
Warren Buffett’s relationship with HP
The first time the Oracle of Omaha bought HP was in April 2022, not long ago. Buffett’s commitment was such that he became the firm’s largest shareholder.
However, the bet did not go well at all. Last year, HP closed down more than 28%, and in 2023, it’s barely up 0.5%. This occurs when the Nasdaq accumulates an increase of 41.5% in the same period.
HP data and a similar bet gone wrong
The company reported its quarterly results two weeks ago and, as expected, they fell short of Wall Street analysts’ expectations. Even experts called the quarter “disappointing.”
Warren Buffett is believed to have bet on the company because of its consistent capital returns generated by HP’s aggressive buyback program and its sizable dividends.
This investment could be compared to what the CEO of Berkshire made in 2011 when he acquired $10.7 billion in IBM shares.
Within seven years, the Oracle of Omaha revealed that he had sold his entire stake in the tech giant, after the company reported nearly six years of declining revenue.
Buffett is believed to have lost quite a bit of money, as he bought IBM for $170 per share and sold in an average range of $140.
