Buffett continues investment resurgence as Berkshire takes $4.2bn stake in HP
Warren Buffet’s investment resurgence continued yesterday as his firm Berkshire Hathaway revealed a 11.4 per cent stake in the US IT giant HP.
Shares in the California-headquartered firm surged ten per cent to $38.38 in after-hours trading after Berkshire disclosed to the US regulator that it had snapped up the stake, worth around $4.2bn.
HP said in a statement yesterday: “Berkshire Hathaway is one of the world’s most respected investors and we welcome them as an investor.”
The HP stake marks Berkshire’s third major investment since late February, after a six year investment drought in which his firm made no major acquisitions.
Buffett told shareholders in his annual letter earlier this year that little “excites us” in equity markets, with the investment giant stashing away $146.7bn of cash and equivalents through the drought.
But the billionaire investor broke the dry spell on March 21 as he snapped up insurance giant Alleghany Corp for $11.6bn in cash, adding to its portfolio of insurers including Geico.
Alleghany has been described as a ‘mini-Berkshire’ due to the diversified nature of the business, which was originally set up by railroad entrepreneurs in 1929 before being transformed into an insurance and investment firm under Fred Morgan Kirby II’s leadership from 1967 to 1992.
Berkshire also invests hundreds of billions of dollars in stocks including Apple, and has also this year invested more than $6.4bn in Occidental Petroleum.