Warren Buffett, known for his shrewd investment decisions, expressed concerns about the future of Paramount Global twice during the second quarter. This raises the question: did these doubts influence Berkshire Hathaway to sell its stake?
Details regarding the media company holding, including any potential changes in Buffett's firm's impressive $350 billion equity portfolio, are eagerly anticipated. Berkshire Hathaway is expected to release its second-quarter 13-F filing, providing insight into their investment activities, late Monday.
What we do know is that Berkshire sold more stock than it purchased in the second quarter. As per our analysis of their equity purchases and sales in the cash-flow statement of their 10-Q report, released on Aug. 5, Berkshire bought approximately $4.5 billion worth of shares and sold around $12.5 billion.
According to their 10-Q, Berkshire offloaded approximately $1.5 billion of Chevron (CVX) shares during the period. Additionally, based on a recent filing, it is likely that they sold nearly $3 billion of Activision Blizzard (ATVI) during the second quarter.
The remaining sales amounting to approximately $8 billion will be disclosed in the upcoming 13-F filing on Monday.
It is worth noting that Berkshire's major holdings, including Apple (AAPL), American Express (AXP), Coca-Cola (KO), and Bank of America (BAC), remained unchanged throughout the quarter, as revealed in the 10-Q report. Therefore, it can be inferred that the sales primarily targeted some of Berkshire's smaller equity investments managed by Buffett, Todd Combs, and Ted Weschler.
Paramount: A Struggling Investment for Berkshire
At the end of the first quarter, Berkshire Hathaway held 93 million shares of Paramount, the owner of the CBS TV network and Paramount movie studio. Despite this significant investment, Paramount has not proven to be a successful venture for Berkshire. In fact, estimates suggest that Berkshire paid around double the current stock price of $15 per share.
Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, expressed his pessimism about Paramount in an interview with CNBC in April and at Berkshire's annual meeting. He stated that "streaming...it's not really a very good business." When asked about his reasons for buying the stock, Buffett simply replied, "Well, we'll see what happens." He acknowledged that while individuals working in the entertainment industry have thrived, shareholders have generally not experienced the same level of success.
During the second quarter, Berkshire took an interest in Occidental Petroleum (OXY), purchasing almost $1 billion worth of shares. The company also made significant investments in five Japanese trading companies, totaling approximately $20 billion in holdings. It is worth noting that these foreign investments, like the Japanese trading companies, are typically not included in quarterly reports such as the 13-F.
Overall, Paramount has presented challenges for Berkshire Hathaway, and its future remains uncertain. As Berkshire releases the details of its second-quarter investments through the 13-F filing, it will be interesting to see how these new ventures contribute to the conglomerate's portfolio.
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