As measured by sentiment from brokerages, analysts, and leading mutual funds, International Business Machines (NYSE: IBM) is among the favorites in looking ahead to 2012.
IBM garnered a lot of attention this year when it was discovered Warren Buffett's Berkshire Hathaway (BRK-B) had been acquiring shares in the company throughout 2011.
Buffett's realization IBM was now a service company with a big moat and growth potential, put the tech giant on everyone's radar again, although many investors have stayed with IBM through the years.
IBM was trading at $185.56, down $0.62, or 0.33 percent, as of 10:34 AM EST.
Showing posts with label Berkshire Hathaway. Show all posts
Showing posts with label Berkshire Hathaway. Show all posts
Friday, December 30, 2011
Tuesday, November 15, 2011
Berkshire (BRK-A) Plows $10.7 Billion into IBM (IBM)
Throughout 2011, Warren Buffett revealed holding company Berkshire Hathaway (NYSE:BRK-A) has acquired about 10.7 billion to acquire shares of IBM (NYSE:IBM). That is over a 5 percent stake in the services company.
Along with IBM, Berkshire also invested in General Dynamics Corp. (NYSE:GD), Intel (NASDAQ:INTC) and DirecTV (NASDAQ:DTV), among others.
After moving from a hardware to a services business, IBM has become the largest provider of technology services in the world.
The stake held by Berkshire in IBM is apparently even larger, as some of the shares were acquired in the fourth quarter.
Presumably the moat Buffett sees in IBM is the stickiness of their services once they are hired by companies, as they are very slow to change, if at all, once IBM gets its foot in the door.
Buffett says the company paid approximately $170 an IBM share on average.
Along with IBM, Berkshire also invested in General Dynamics Corp. (NYSE:GD), Intel (NASDAQ:INTC) and DirecTV (NASDAQ:DTV), among others.
After moving from a hardware to a services business, IBM has become the largest provider of technology services in the world.
The stake held by Berkshire in IBM is apparently even larger, as some of the shares were acquired in the fourth quarter.
Presumably the moat Buffett sees in IBM is the stickiness of their services once they are hired by companies, as they are very slow to change, if at all, once IBM gets its foot in the door.
Buffett says the company paid approximately $170 an IBM share on average.
Thursday, August 25, 2011
Bove Says BofA (NYSE:BAC), Buffett Deal Sucks
According to Rochdale Securities analyst Dick Bove, the deal by Bank of America (NYSE:BAC) CEO Brian Moynihan allowing Warren Buffett's Berkshire Hathaway (NYSE:BRK-A) to invest $5 billion in the bank, harms both Moynihan and the giant bank.
Bove said, "He's gone back on his word. That is, I think, a big negative given his credibility is under such question. Now why did he do it? He did it because he needed to buy credibility." Its "a terrible, terrible deal," concludes Bove, "There's no way the bank can make money."
Essentially Bank of America is buying Buffett's endorsement for approximately $300 million annually. That doesn't include the warrants to acquire 700 million shares of Bank of America stock at just over $7.14 a share. Buffett could cash them in now for a nice profit, as the bank is trading at $7.69 a share, as of 12:38 PM EDT.
In response to Bove's criticism, Bank of America's Moynihan released a statement saying this:
"I remain confident that we have the capital and liquidity we need to run our business. At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy."
My question is why didn't Moynihan just say right out that the bank has the capital and liquidity, not that he was "confident" they did?
Bove said, "He's gone back on his word. That is, I think, a big negative given his credibility is under such question. Now why did he do it? He did it because he needed to buy credibility." Its "a terrible, terrible deal," concludes Bove, "There's no way the bank can make money."
Essentially Bank of America is buying Buffett's endorsement for approximately $300 million annually. That doesn't include the warrants to acquire 700 million shares of Bank of America stock at just over $7.14 a share. Buffett could cash them in now for a nice profit, as the bank is trading at $7.69 a share, as of 12:38 PM EDT.
In response to Bove's criticism, Bank of America's Moynihan released a statement saying this:
"I remain confident that we have the capital and liquidity we need to run our business. At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy."
My question is why didn't Moynihan just say right out that the bank has the capital and liquidity, not that he was "confident" they did?
Buffet's Berkshire (BRK-A) Props BoA (BAC)
Berkshire Hathaway (NYSE:BRK-A) announced it has invested $5 billion in Bank of America (NYSE:BAC), in a deal similar to the one Warren Buffett made when he invested in Goldman Sachs (NYSE:GS).
Some are spinning this as some type of patriotic move by Buffett, but that's a ridiculous and ignorant conclusion. Buffett knows the stock has been beaten down, and this is all about creating shareholder value and nothing else.
This is why Buffett likes to support the state interference in financial companies, as it makes it a sure bet to invest in when they are under pressure, knowing he is about as safe as he can be with the capital he invests.
Buffett's investment is in 50,000 shares of cumulative perpetual preferred stock, which will give a 6 percent annual dividend. Bank of America can acquire the stock back any time by paying a premium of 5 percent.
Berkshire also has the option of acquiring 700 million shares of Bank of America via warrant priced at about $7.14 a share. The company exercise the warrants any time over the next ten years.
Investors have been hammering Bank of America its mortgage loan portfolio, as it is believed the giant financial institution has billions left to deal with.
Bank of America was trading at $7.83, gaining $0.84, or 12.02 percent, as of 11:53 AM EDT.
Some are spinning this as some type of patriotic move by Buffett, but that's a ridiculous and ignorant conclusion. Buffett knows the stock has been beaten down, and this is all about creating shareholder value and nothing else.
This is why Buffett likes to support the state interference in financial companies, as it makes it a sure bet to invest in when they are under pressure, knowing he is about as safe as he can be with the capital he invests.
Buffett's investment is in 50,000 shares of cumulative perpetual preferred stock, which will give a 6 percent annual dividend. Bank of America can acquire the stock back any time by paying a premium of 5 percent.
Berkshire also has the option of acquiring 700 million shares of Bank of America via warrant priced at about $7.14 a share. The company exercise the warrants any time over the next ten years.
Investors have been hammering Bank of America its mortgage loan portfolio, as it is believed the giant financial institution has billions left to deal with.
Bank of America was trading at $7.83, gaining $0.84, or 12.02 percent, as of 11:53 AM EDT.
Tuesday, August 9, 2011
Berkshire's (BRK) Warren Buffett Losing Credibility in Twilight Years
Berkshire Hathaway's (NYSE:BRK-A) Warren Buffett has gradually undermined his credibility over the last several years, possibly significantly weakening his legacy, as he has forgone his own advice and stepped outside his expertise and entered into the macro-economic fray, where he is far from an expert, and which he revealed himself as very politically partisan, ruining what had in general, been a more objective participation in the past.
Buffett has moved almost lockstep economically with Obama, support his Keynesian practices of printing money as the answer to all our economic ills. Buffett has also ridiculously called for higher taxation of the productive, using the tired old idea of everyone needing to pay their "fair" share, even though the wealthy pay far more in taxes than everyone else.
In the end, Buffett and Berkshire wildly benefit from big government and their intervention in the free market, and his inputs have been colored by that self-enhancement.
Warren Buffett years ago broke away from his father Howard Buffett economically, who supported liberty in the markets, and life in general, looking for much smaller government.
The worst offense, to me, with Warren Buffett, is his recent declaration the cut in the AAA credit rating in the U.S. was uncalled for, not noting Berkshire Hathaway is a major holder in S&P's competitor Moody's (NYSE:MCO).
You have to question Buffett's credibility or ability to think straight any longer, as to suggest that the U.S. is financially healthy and should continue to be rated AAA, suggests the loss of one or the other, maybe both.
Most people, even his economic detractors, have always had respect for Warren Buffett, who is fact is probably the greatest investor of all time. But to see him speaking as he has, points to either a loss of integrity or a weakening of his faculties. Either way, there is now a taint on Warren Buffett history will probably take note of, which hadn't been there in the past.
The bottom line is Warren Buffett is no longer an economic bellwether, and for whichever reason, can no longer be trusted as he has been in the past.
Buffett has moved almost lockstep economically with Obama, support his Keynesian practices of printing money as the answer to all our economic ills. Buffett has also ridiculously called for higher taxation of the productive, using the tired old idea of everyone needing to pay their "fair" share, even though the wealthy pay far more in taxes than everyone else.
In the end, Buffett and Berkshire wildly benefit from big government and their intervention in the free market, and his inputs have been colored by that self-enhancement.
Warren Buffett years ago broke away from his father Howard Buffett economically, who supported liberty in the markets, and life in general, looking for much smaller government.
The worst offense, to me, with Warren Buffett, is his recent declaration the cut in the AAA credit rating in the U.S. was uncalled for, not noting Berkshire Hathaway is a major holder in S&P's competitor Moody's (NYSE:MCO).
You have to question Buffett's credibility or ability to think straight any longer, as to suggest that the U.S. is financially healthy and should continue to be rated AAA, suggests the loss of one or the other, maybe both.
Most people, even his economic detractors, have always had respect for Warren Buffett, who is fact is probably the greatest investor of all time. But to see him speaking as he has, points to either a loss of integrity or a weakening of his faculties. Either way, there is now a taint on Warren Buffett history will probably take note of, which hadn't been there in the past.
The bottom line is Warren Buffett is no longer an economic bellwether, and for whichever reason, can no longer be trusted as he has been in the past.
Berkshire (BRK-B) (WLK) (ATK) (NKTR) (VIA) (CF) Price Targets Changed
Berkshire Hathaway (NYSE: BRK-B), Westlake Chemical Corp (NYSE: WLK), Alliant Techsystems Inc. (NYSE: ATK), Nektar Therapeutics (NASDAQ: NKTR), Viacom Inc. (NYSE: VIA) and CF Industries Holdings Inc (NYSE: CF) price targets adjusted by analysts.
Berkshire Hathaway (BRK-B) had its price target lowered by Barclays Capital from $92.00 to $85.00. They have an “Equal Weight” rating on the company.
Westlake Chemical Corporation (WLK) had its price target lowered by Deutsche Bank (NYSE:DB) from $52.00 to $48.00. They have a “Hold” rating on the company.
Alliant Techsystems Inc. (ATK) had its price target lowered by Barclays Capital from $84.00 to $74.00. They have an “Equal Weight” rating on the company.
Nektar Therapeutics (NKTR) had its price target lowered by Deutsche Bank from $14.00 to $11.00. They have a “Buy” rating on the company.
Viacom Inc. (VIA) had its price target raised by Barclays Capital from $55.00 to $57.00. They have an “Overweight” rating on the company.
CF Industries Holdings Inc. (CF) had its price target raised by Barclays Capital from $158.00 to $170.00. They have an “Equal Weight” rating on the company.
Berkshire Hathaway (BRK-B) had its price target lowered by Barclays Capital from $92.00 to $85.00. They have an “Equal Weight” rating on the company.
Westlake Chemical Corporation (WLK) had its price target lowered by Deutsche Bank (NYSE:DB) from $52.00 to $48.00. They have a “Hold” rating on the company.
Alliant Techsystems Inc. (ATK) had its price target lowered by Barclays Capital from $84.00 to $74.00. They have an “Equal Weight” rating on the company.
Nektar Therapeutics (NKTR) had its price target lowered by Deutsche Bank from $14.00 to $11.00. They have a “Buy” rating on the company.
Viacom Inc. (VIA) had its price target raised by Barclays Capital from $55.00 to $57.00. They have an “Overweight” rating on the company.
CF Industries Holdings Inc. (CF) had its price target raised by Barclays Capital from $158.00 to $170.00. They have an “Equal Weight” rating on the company.
Monday, May 2, 2011
Berkshire's (BRK-A) Preview Shows Earnings Plunge for 1Q
Berkshire Hathaway Inc. (NYSE:BRK-A) tried to manage and lower expectations of shareholders for its upcoming quarterly report, as the company announced Saturday that disasters in Australia, New Zealand and Japan will weigh heavily on the results of the company, and the company's earnings will plunge in the first quarter.
Chief Executive Officer Warren Buffett said at the company's annual shareholders meeting, the he looks for net earnings of $1.5 billion for the first quarter, a dramatic fall from $3.63 billion reported last year.
Operating earnings, which excludes certain gains/losses, are projected to be $1.59 billion for the quarter, compared with $2.22 billion in the same quarter last year.
Insurance underwriting losses for the quarter will come in at $821 million, far below the gain of $226 million last year.
Buffett added that pretax losses from the disasters are close to $1.67 billion for the quarter. This includes $1.06 billion from the Japan earthquake, $412 million from the New Zealand earthquake, and the rest from the Australian floods.
Berkshire closed Friday at $124,570, down $55.00, or 0.04 percent.
Chief Executive Officer Warren Buffett said at the company's annual shareholders meeting, the he looks for net earnings of $1.5 billion for the first quarter, a dramatic fall from $3.63 billion reported last year.
Operating earnings, which excludes certain gains/losses, are projected to be $1.59 billion for the quarter, compared with $2.22 billion in the same quarter last year.
Insurance underwriting losses for the quarter will come in at $821 million, far below the gain of $226 million last year.
Buffett added that pretax losses from the disasters are close to $1.67 billion for the quarter. This includes $1.06 billion from the Japan earthquake, $412 million from the New Zealand earthquake, and the rest from the Australian floods.
Berkshire closed Friday at $124,570, down $55.00, or 0.04 percent.
Tuesday, April 19, 2011
Buffett, Berkshire (BRK-A) Sued Over Sokol, Lubrizol (LZ) Situation
In what appears to be the first lawsuit filed against Berkshire Hathaway Inc. (NYSE:BRK-A) and Warren Buffett over the recommendation by former Berkshire manager David Sokol for Buffett to invest in Lubrizol Corp. (NYSE:LZ) after Sokol had acquired shares in the company, Berkshire investor Mason Kirby is asking for the recovery of damages.
Kirby stated in papers made public in Delaware Chancery Court in Wilmington, “Sokol knew that Buffett would closely consider and likely take his recommendation. As a result of Sokol’s unethical behavior, Berkshire suffered significant reputational losses and other damages.”
Kirby asserts that Buffett and Sokol, “working in concert,” violated duties to shareholders “and put the company at risk for a potential adverse SEC action and negative credit rating.”
Sokol acquired over 96,000 shares of Lubrizol in early January before making a recommendation to Buffett for Berkshire to acquire shares in the company.
Berkshire was trading at $120,903.00, gaining $378.00, or 0.31 percent, as of 2:55 PM EDT.
Kirby stated in papers made public in Delaware Chancery Court in Wilmington, “Sokol knew that Buffett would closely consider and likely take his recommendation. As a result of Sokol’s unethical behavior, Berkshire suffered significant reputational losses and other damages.”
Kirby asserts that Buffett and Sokol, “working in concert,” violated duties to shareholders “and put the company at risk for a potential adverse SEC action and negative credit rating.”
Sokol acquired over 96,000 shares of Lubrizol in early January before making a recommendation to Buffett for Berkshire to acquire shares in the company.
Berkshire was trading at $120,903.00, gaining $378.00, or 0.31 percent, as of 2:55 PM EDT.
Tuesday, April 12, 2011
Berkshire (BRK-A) Hires Wells (WFC) for Bond Underwriting
Warren Buffett's Berkshire Hathaway (NYSE:BRK-A), which has a huge stake in Wells Fargo (NYSE:WFC), has hired the investment banking unit of the company to underwrite a $1.5 billion bond offering in January.
With not much growth opportunity in retail and commercial banking, Wells Fargo is looking to expand its investment banking operations to compete more with giants in that segment like Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JP Morgan Chase (NYSE:JPM), which are far larger in that area.
Contrary to the strategies used by its rivals, it appears Wells Fargo isn't going to go the route of hiring the big players in investment banking, rather they're attempting to market its strong balance sheet in hopes of attracting underwriting clients, according to the Wall Street Journal.
Wells Fargo was trading at $31.32, falling $0.08, or 0.25 percent, as of 1:24 PM EDT. Berkshire was trading at $122,377., down $1,120.00, or 0.91 percent.
With not much growth opportunity in retail and commercial banking, Wells Fargo is looking to expand its investment banking operations to compete more with giants in that segment like Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JP Morgan Chase (NYSE:JPM), which are far larger in that area.
Contrary to the strategies used by its rivals, it appears Wells Fargo isn't going to go the route of hiring the big players in investment banking, rather they're attempting to market its strong balance sheet in hopes of attracting underwriting clients, according to the Wall Street Journal.
Wells Fargo was trading at $31.32, falling $0.08, or 0.25 percent, as of 1:24 PM EDT. Berkshire was trading at $122,377., down $1,120.00, or 0.91 percent.
Thursday, April 7, 2011
Berkshire (BRK-A) (GOOG) Interested in Wind Turbines?
Even though wind power isn't the most reliable source of energy, some companies, including Google (NASDAQ:GOOG) and Warren Buffett's Berkshire Hathaway (NYSE:BRK-A) has apparently shown some interest in wind turbines, according to a couple of the world's largest manufacturers.
The interest of Google and Berkshire Hathaway allegedly stem from railroads in the case of Berkshire, and large computer server farms with Google.
Andris Cukurs, head of North American operations at Suzlon Energy Ltd. (SUEL), said, “Railroads could be huge potential customers of wind turbines, and companies like Google have already shown some interest. We expect to see more large energy consumers get involved directly in wind.”
Even so, orders have been falling in the case of developers in the U.S. like NextEra Energy Inc. (NYSE:NEE) and Exelon Corp. (NYSE:EXC), pushing wind turbine manufacturers to seek other customers outside of independent power producers.
Martha Wyrsch, president of Vestas’s unit in the region, added, “In North America, we’ve totally restructured our sales force and hired more engineers to work with customers that don’t have much experience with wind farms. We are seeing a lot of interest from carbon-conscious companies that we never saw before.”
With wind turbine sales about 30 percent below 2009 levels in 2011, and expected to stay that way for the year, the industry is struggling, and when asked about interest in wind turbines, it's only in the sense of delivering parts, not for the company's own use, casting a shadow on some of the assertions made.
Google for their part, also hasn't ordered any wind turbines to build wind farms, although they did offer to help develop a $5 billion high-voltage transmission line that could connect to offshore wind turbines off the Atlantic Coast from New Jersey to Virginia.
In conclusion, it appears the secondary connection of Berkshire and Google was used to make it look like interest was growing outside of the base wind turbine customers, when neither of the company's have had an interest in purchasing the turbines themselves.
The interest of Google and Berkshire Hathaway allegedly stem from railroads in the case of Berkshire, and large computer server farms with Google.
Andris Cukurs, head of North American operations at Suzlon Energy Ltd. (SUEL), said, “Railroads could be huge potential customers of wind turbines, and companies like Google have already shown some interest. We expect to see more large energy consumers get involved directly in wind.”
Even so, orders have been falling in the case of developers in the U.S. like NextEra Energy Inc. (NYSE:NEE) and Exelon Corp. (NYSE:EXC), pushing wind turbine manufacturers to seek other customers outside of independent power producers.
Martha Wyrsch, president of Vestas’s unit in the region, added, “In North America, we’ve totally restructured our sales force and hired more engineers to work with customers that don’t have much experience with wind farms. We are seeing a lot of interest from carbon-conscious companies that we never saw before.”
With wind turbine sales about 30 percent below 2009 levels in 2011, and expected to stay that way for the year, the industry is struggling, and when asked about interest in wind turbines, it's only in the sense of delivering parts, not for the company's own use, casting a shadow on some of the assertions made.
Google for their part, also hasn't ordered any wind turbines to build wind farms, although they did offer to help develop a $5 billion high-voltage transmission line that could connect to offshore wind turbines off the Atlantic Coast from New Jersey to Virginia.
In conclusion, it appears the secondary connection of Berkshire and Google was used to make it look like interest was growing outside of the base wind turbine customers, when neither of the company's have had an interest in purchasing the turbines themselves.
Friday, April 1, 2011
Berkshire (BRK-A), Buffett Drooling over India
Although China has been an investors dream for some time, it has been so played out in the media, it's been harder to find deals there than it may be in India, even with its draconian rules. But that's not stopping Berkshire Hathaway (NYSE:BRK-a) and Warren Buffett from looking to spread their wings there.
What's powerful about India is the fact that Buffett can look at all sorts of infrastructure and foundational sectors which are very close to being at the beginning of the India growth story.
Couple that with Buffett's long-term horizon, and there is extraordinary potential there.
Eventually India will have to change its current rules which hold back capital investment and entry into the market, and when it does, those invested or prepared to invest could and will make a fortune, assuming the perform due diligence and know what they're doing.
Buffett obviously does, and that will bold well for the company if he's able to stick around long enough to make some effective moves.
Berkshire closed Thursday at $125,300, falling $2,803.00, or 2.19 percent.
What's powerful about India is the fact that Buffett can look at all sorts of infrastructure and foundational sectors which are very close to being at the beginning of the India growth story.
Couple that with Buffett's long-term horizon, and there is extraordinary potential there.
Eventually India will have to change its current rules which hold back capital investment and entry into the market, and when it does, those invested or prepared to invest could and will make a fortune, assuming the perform due diligence and know what they're doing.
Buffett obviously does, and that will bold well for the company if he's able to stick around long enough to make some effective moves.
Berkshire closed Thursday at $125,300, falling $2,803.00, or 2.19 percent.
Thursday, March 31, 2011
Warren Buffett (BRK-A) Accepts Heir-Apparent's Resignation
Contrary to the past actions of Berkshire Hathaway (NYSE:BRK-A) CEO Warren Buffett concerning prior resignation attempts by David Sokol, Chairman, MidAmerican Energy Holdings, and Chairman, President, and CEO of NetJets, this time he accepted the resignation, in what appears to be in response to something that irked Buffett.
Buffett said in a press release, "Dave’s letter was a total surprise to me, despite the two earlier resignation talks. I had spoken with him the previous day about various operating matters and received no hint of his intention to resign. This time, however, I did not attempt to talk him out of his decision and accepted his resignation."
The accepted resignation appears to come from Sokol's acquisition of shares in Lubrizol (NYSE:LZ) before he had attempted to convince Buffett to invest in the company.
While Buffett doesn't believe it was in any way unlawful, the tone of his press release seemed to be that he was somewhat irritated by what could be construed as an impropriety.
As in the past, Sokol said he wants to pursue philanthropic efforts.
Buffett quoted him saying, “As I have mentioned to you in the past, it is my goal to utilize the time remaining in my career to invest my family’s resources in such a way as to create enduring equity value and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests. I have no more detailed plan than this because my obligations from Berkshire Hathaway have been my first and only business priority.”
Buffett said in a press release, "Dave’s letter was a total surprise to me, despite the two earlier resignation talks. I had spoken with him the previous day about various operating matters and received no hint of his intention to resign. This time, however, I did not attempt to talk him out of his decision and accepted his resignation."
The accepted resignation appears to come from Sokol's acquisition of shares in Lubrizol (NYSE:LZ) before he had attempted to convince Buffett to invest in the company.
While Buffett doesn't believe it was in any way unlawful, the tone of his press release seemed to be that he was somewhat irritated by what could be construed as an impropriety.
As in the past, Sokol said he wants to pursue philanthropic efforts.
Buffett quoted him saying, “As I have mentioned to you in the past, it is my goal to utilize the time remaining in my career to invest my family’s resources in such a way as to create enduring equity value and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests. I have no more detailed plan than this because my obligations from Berkshire Hathaway have been my first and only business priority.”
Monday, March 21, 2011
Buffett, Berkshire (BRK-A) in Sad Goodbye to Goldman (GS) Preferred
Liz Claman and Charles Gasparino broke down some of the response of Warren Buffett in this video over the $5 billion-plus sale of preferreds Berkshire Hathaway (NYSE:BRK-A) had owned in Goldman Sachs (NYSE:GS), which generated a cool $500,000 annually for the company.
Yet Berkshire still owns about $2 billion in warrants in the giant bank, which they have time to sit on until Goldman surges again, which is inevitable.
They also noted that Goldman CEO Lloyd Blankfein wants out of his position, as the scrutiny appears to be taking the enjoyment out of running the business.
Goldman (GS) Paying Berkshire (BRK-A) $5.65 Billion
The Goldman Sachs Group Inc. (NYSE:GS) announced Friday it has received permission from regulators to spend $5.65 billion to repurchase Berkshire Hathaway's (NYSE:BRK-A) preferred shares in the bank.
Goldman said the Federal Reserve has approved its plan to repay Warren Buffett's company for the $5 billion investment it made at the height of the financial crisis in the fall of 2008.
Goldman was eager to repay Berkshire because it had been paying 10 percent interest on the preferred shares, which translated into an annual expense of $500 million.
"Berkshire Hathaway's 2008 investment in Goldman Sachs was a major vote of confidence in our firm and we are very appreciative of it," Goldman spokesman Stephen Cohen said.
The repurchase will weigh down Goldman's first-quarter earnings by $2.80 per share because it includes a one-time preferred dividend of about $1.65 billion.
The Federal Reserve also approved Goldman's overall capital spending plan for 2011, including the repurchase of common stock and a possible increase in the bank's quarterly dividend. But Goldman did not announce any stock purchase or dividend plans on Friday.
Goldman closed Friday at $159.96, up $4.21, or 2.70 percent. Berkshire closed at $124,700, up $675, or 0.54 percent.
Source
Goldman said the Federal Reserve has approved its plan to repay Warren Buffett's company for the $5 billion investment it made at the height of the financial crisis in the fall of 2008.
Goldman was eager to repay Berkshire because it had been paying 10 percent interest on the preferred shares, which translated into an annual expense of $500 million.
"Berkshire Hathaway's 2008 investment in Goldman Sachs was a major vote of confidence in our firm and we are very appreciative of it," Goldman spokesman Stephen Cohen said.
The repurchase will weigh down Goldman's first-quarter earnings by $2.80 per share because it includes a one-time preferred dividend of about $1.65 billion.
The Federal Reserve also approved Goldman's overall capital spending plan for 2011, including the repurchase of common stock and a possible increase in the bank's quarterly dividend. But Goldman did not announce any stock purchase or dividend plans on Friday.
Goldman closed Friday at $159.96, up $4.21, or 2.70 percent. Berkshire closed at $124,700, up $675, or 0.54 percent.
Source
Monday, March 14, 2011
Buffett, Berkshire (BRK-A) Acquire Lubrizol (LZ) for $9 Billion
Take away the major $26 billion deal for Burlington Northern Santa Fe, the $9 billion acquisition of Lubrizol (NYSE:LZ) by Warren Buffett and Berkshire Hathaway (NYSE:BRK-A) is one of the largest deals made in years.
Berkshire Hathaway said in a news release today it was acquiring Lubrizol for close to $9 billion in cash, and will assume approximately $700 million in debt as well.
The offer is $135 a share for the chemicals company, a 28 percent premium over Friday's closing price of $105.44 and an 18 percent increase over its all-time high.
Buffett said this about the deal: "Lubrizol is exactly the sort of company with which we love to partner - the global leader in several market applications run by a talented CEO, James Hambrick. Our only instruction to James - just keep doing for us what you have done so successfully for your shareholders."
Luzrizol was trading at $134.06, up $28.62, or 27.14, as of 11:43 AM EST. Berkshire Hathaway was trading at $126,045.00, down $1,955.00, or 1.53 percent.
Berkshire Hathaway said in a news release today it was acquiring Lubrizol for close to $9 billion in cash, and will assume approximately $700 million in debt as well.
The offer is $135 a share for the chemicals company, a 28 percent premium over Friday's closing price of $105.44 and an 18 percent increase over its all-time high.
Buffett said this about the deal: "Lubrizol is exactly the sort of company with which we love to partner - the global leader in several market applications run by a talented CEO, James Hambrick. Our only instruction to James - just keep doing for us what you have done so successfully for your shareholders."
Luzrizol was trading at $134.06, up $28.62, or 27.14, as of 11:43 AM EST. Berkshire Hathaway was trading at $126,045.00, down $1,955.00, or 1.53 percent.
Friday, March 11, 2011
Berkshire (BRK-A), (AIG), (CB), (XL),(RE), (PRU) Could Get Slammed from Japan Quake
The insurance industry has been especially hit hard and expected to have the most exposure overall to the 8.9 quake in Japan, which is the strongest in over a century.
Companies like Berkshire Hathaway (NYSE:BRK-A), Prudential (NYSE:PRU), American International Group (NYSE:AIG), Chubb Group (NYSE:CB), XL Group plc (NYSE:XL) and Everest Re Group Ltd. (NYSE:RE) are among those that could be negatively impacted over time, as far as those trading in the United States.
Claims from the disaster are expected to reach into the tens of billions.
Other secondary effects in physical Japan are for companies like Toyota Motor Corp. (NYSE:TM), Sony Corporation (NYSE:SNE) and Honda Motor (NYSE:HMC), which have had to close plants.
Reinsurers like RenaissanceRe (NYSE:RNR) and Axis Capital (NYSE:AXS) are still recovering from the New Zealand earthquake in February.
Companies like Berkshire Hathaway (NYSE:BRK-A), Prudential (NYSE:PRU), American International Group (NYSE:AIG), Chubb Group (NYSE:CB), XL Group plc (NYSE:XL) and Everest Re Group Ltd. (NYSE:RE) are among those that could be negatively impacted over time, as far as those trading in the United States.
Claims from the disaster are expected to reach into the tens of billions.
Other secondary effects in physical Japan are for companies like Toyota Motor Corp. (NYSE:TM), Sony Corporation (NYSE:SNE) and Honda Motor (NYSE:HMC), which have had to close plants.
Reinsurers like RenaissanceRe (NYSE:RNR) and Axis Capital (NYSE:AXS) are still recovering from the New Zealand earthquake in February.
Wednesday, March 9, 2011
BofA (BAC) `Again a Growth Company' Says Moynihan
Bank of America Corp. (BAC) CEO Chief Executive Officer Brian T. Moynihan gave his giant bank a boost on Tuesday as he attempted to convince shareholders and potential investors the company was "again a growth company."
Moynihan claimed in an investor day presentation that “We can generate significant excess capital and return it to shareholders.”
Berkshire Hathaway (NYSE:BRK-A) CEO Warren Buffett, who is a bellwether himself, wasn't convinced, and divested of all his holdings in Bank of America last quarter, generating concerns over the growth prospects of the giant bank.
“We are changing the culture of the company from a company that was built upon acquisitions and consolidation,” Moynihan exclaimed. “We are again a growth company.” Only time will tell.
Bank of America closed Tuesday at $14.69, up $0.66, or 4.70 percent.
Moynihan claimed in an investor day presentation that “We can generate significant excess capital and return it to shareholders.”
Berkshire Hathaway (NYSE:BRK-A) CEO Warren Buffett, who is a bellwether himself, wasn't convinced, and divested of all his holdings in Bank of America last quarter, generating concerns over the growth prospects of the giant bank.
“We are changing the culture of the company from a company that was built upon acquisitions and consolidation,” Moynihan exclaimed. “We are again a growth company.” Only time will tell.
Bank of America closed Tuesday at $14.69, up $0.66, or 4.70 percent.
Monday, March 7, 2011
Ford (F) Facing CEO Succession Concerns
An article from the Detroit Free Press started the conversation again about the succession plans of Ford Motor (NYSE:F), which has apparently had a detrimental effect on the stock of the company Monday.
The Detroit Free Press noteded the potential succession of CEO Alan Mulally, which may happen before the end of 2011 or potentially within the next few years. Mulally, though 65, hasn't made any official comments about stepping down as Chief at Ford, but some speculate as to who will be next in line should something happen.
An aging Warren Buffett as Berkshire Hathaway (NYSE:BRK-A) and poor health of Apple's (NASDAQ:AAPL) CEO Steve Jobs has shareholders pressuring companies to lay out a more transparent process concerning succession plans for the heads of companies.
Some names being thrown about for potential successors to Mulally include Ford Americas President Mark Fields, Ford Europe CEO Stephen Odell, Asia Pacific and Africa President Joe Hinrichs, Group Vice President of Marketing Jim Farley and Vice President of Global Product Development Derrick Kuzak.
CFO Lewis Booth and Chairman Bill Ford, Jr. are considered possible short-term candidates in case something unexpected happens.
Ford was trading at $14.03, down $0.39, or 2.67 percent, as of 1:12 PM EST.
The Detroit Free Press noteded the potential succession of CEO Alan Mulally, which may happen before the end of 2011 or potentially within the next few years. Mulally, though 65, hasn't made any official comments about stepping down as Chief at Ford, but some speculate as to who will be next in line should something happen.
An aging Warren Buffett as Berkshire Hathaway (NYSE:BRK-A) and poor health of Apple's (NASDAQ:AAPL) CEO Steve Jobs has shareholders pressuring companies to lay out a more transparent process concerning succession plans for the heads of companies.
Some names being thrown about for potential successors to Mulally include Ford Americas President Mark Fields, Ford Europe CEO Stephen Odell, Asia Pacific and Africa President Joe Hinrichs, Group Vice President of Marketing Jim Farley and Vice President of Global Product Development Derrick Kuzak.
CFO Lewis Booth and Chairman Bill Ford, Jr. are considered possible short-term candidates in case something unexpected happens.
Ford was trading at $14.03, down $0.39, or 2.67 percent, as of 1:12 PM EST.
Thursday, March 3, 2011
Apple (AAPL) At Top of Fortune's 'Most Admired' List
Of the top 50 most-admired companies in the world, Apple (NASDAQ:AAPL) landed at the top of the list of Fortune magazine. Following closely on the heels of Apple was nemesis Google (NASDAQ:GOOG), which came in at No. 2.
Fortune said about Apple, "The company's blistering pace of new product releases has continued to set the bar high for tech companies across the board."
Following the two tech giants was Warren Buffett's Berkshire Hathaway (NYSE:BRK-A), Southwest Airlines (NYSE:LUV) and Proctor & Gamble (NYSE:PG), in that order.
Others making the list were Coca Cola (NYSE:KO), in 6th place; Amazon.com (NASDAQ:AMZN) in 7th; FedEX (NYSE:FDX) in 8th; Cisco (Nasdaq:CSCO) in 9th. Microsoft (NASDAQ:MSFT) came in at 15th.
The rankings of the companies on the list were measured on innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment, quality of products/services and global competitiveness.
Fortune said about Apple, "The company's blistering pace of new product releases has continued to set the bar high for tech companies across the board."
Following the two tech giants was Warren Buffett's Berkshire Hathaway (NYSE:BRK-A), Southwest Airlines (NYSE:LUV) and Proctor & Gamble (NYSE:PG), in that order.
Others making the list were Coca Cola (NYSE:KO), in 6th place; Amazon.com (NASDAQ:AMZN) in 7th; FedEX (NYSE:FDX) in 8th; Cisco (Nasdaq:CSCO) in 9th. Microsoft (NASDAQ:MSFT) came in at 15th.
The rankings of the companies on the list were measured on innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment, quality of products/services and global competitiveness.
Tuesday, March 1, 2011
Berkshire (BRK-A) Adds Fourth Buffett Replacement to Pool
For several years Berkshire Hathaway (NYSE:BRK-A) has said they have three people in mind that could replace CEO Warren Buffett when the time comes for that to happen.
They said in a recent regulatory filing that they've now added a fourth candidate as a possible Buffett replacement.
One thing known about the Berkshire plan to replace Buffett will his role will be distributed in three parts - chief executive officer, chairman and several investment managers.
Adding a fourth potential candidate to the succession plans seems to strengthen speculation that has swirled around Burlington Northern Santa Fe CEO Matt Rose that he has been a contender for the position, which most think of as CEO when focusing on the future Berkshire succession process.
As far as the position of chairman, Buffett has made a personal recommendation that his son Howard fill that role, citing the desire to see the culture of Berkshire maintained.
They said in a recent regulatory filing that they've now added a fourth candidate as a possible Buffett replacement.
One thing known about the Berkshire plan to replace Buffett will his role will be distributed in three parts - chief executive officer, chairman and several investment managers.
Adding a fourth potential candidate to the succession plans seems to strengthen speculation that has swirled around Burlington Northern Santa Fe CEO Matt Rose that he has been a contender for the position, which most think of as CEO when focusing on the future Berkshire succession process.
As far as the position of chairman, Buffett has made a personal recommendation that his son Howard fill that role, citing the desire to see the culture of Berkshire maintained.
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