Financial transaction

Warren Buffett’s Berkshire Hathaway buys $4.2 billion stake in HP, sending shares up 14%

Jason Doiy / iStock.com

“The Oracle of Omaha” continues to deploy its massive cash reserves, revealing that it has purchased a major stake in HP, according to regulatory filings. The news sent HP shares up 14% in premarket trading on April 7.

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Warren Buffett’s Berkshire Hathaway now owns 121 million shares, bought in multiple deals this week, according to a Securities and Exchange Commission (SEC) filing. The stake is valued at more than $4.2 billion, according to Bloomberg.

“Berkshire’s acquisition of HP shares is consistent with its strategy of holding ‘value’ technology stocks,” Cathy Seifert, vice president of CFRA Research, told GOBankingRates. “This, together with its investments in financial services, forms an attractive equity portfolio that complements its operating subsidiaries primarily in the areas of energy, industrials, insurance and consumer.”

On March 21, Berkshire Hathaway announced that it had acquired “mini Berkshire” insurer Alleghany Corp., for $11.6 billion on March 21, finally beginning to deploy some of its massive cash reserves.

Buffett’s Berkshire Hathaway reached a market capitalization of $700 billion in the first week of January, despite its aggressive buyout strategy in 2021, as GOBankingRates previously reported.

Indeed, in the third quarter of 2021, about $7.6 billion was used to buy back Berkshire shares, bringing the nine-month total to about $20.2 billion, according to the earnings report. In January, the Oracle of Omaha conglomerate had more than $149 billion in cash, cash equivalents and short-term treasury bills, up from $144 billion in the previous quarter.

And on Feb. 14, Berkshire Hathaway released its stock investments as of Dec. 31, 2021, revealing the purchase of a significant stake in Activision, according to SEC filing 13F.

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Berkshire held 14.66 million shares valued at $975 million at the end of 2021, according to filing 13F. Barron’s reported that the stock closed Feb. 14 at $81.50. Berkshire’s stake in Activision stock is now worth more than $1 billion. The stock was flat on February 15 and has risen 20% since the start of the year.

Activision’s stake was taken just before Microsoft announced acquisition plans in January, for $95 per share, in an all-cash deal valued at $68.7 billion, including Activision Blizzard’s net cash. Upon closing of the transaction, Microsoft will become the world’s third largest gaming company by revenue, behind Tencent and Sony, according to a press release.

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About the Author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael is now independent and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.