Monday, December 23, 2024

Berkshire Hathaway’s Cash Pile Reaches Record $325.2 Billion

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(Bloomberg) — Berkshire Hathaway Inc.’s cash pile reached $325.2 billion in the third quarter, a record for the conglomerate, as Warren Buffett continued to refrain from major acquisitions while trimming some of his most significant equity stakes.

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Berkshire once again cut its holdings in Apple Inc., the Omaha, Nebraska-based company said Saturday in a statement. Its stake in the iPhone maker was valued at $69.9 billion at the end of the quarter, down from $84.2 billion in the second quarter, indicating that Berkshire cut its stake by about 25%.

Berkshire first disclosed its Apple stake in 2016 and had spent $31.1 billion for the 908 million Apple shares it held through the end of 2021.

Buffett said in May that Apple would likely remain Berkshire’s top holding, indicating that tax issues had motivated the sale. “I don’t mind at all, under current conditions, building the cash position,” he said at the annual shareholder meeting.

“I don’t think Warren Buffett’s ever really been super comfortable with technology,” said Jim Shanahan, an analyst at Edward Jones.

Cathy Seifert, a research analyst at CFRA, said Berkshire’s Apple stake was “starting to become an outsized percentage” of its overall portfolio. “I think it made sense to sort of lighten that exposure a little bit,” she said.

Net Seller

Berkshire reported $34.6 billion of net share sales in the three months through September.

The company has struggled to find ways to deploy its cash pile, as Buffett has found market prices too high to find attractive deals. At the annual meeting, Buffett said Berkshire wasn’t in a rush to spend “unless we think we’re doing something that has very little risk and can make us a lot of money.”

Higher yields on cash holdings set “the bar a little bit higher for other opportunities,” Shanahan said.

Interest and other investment income has more than doubled at the conglomerate’s insurance business, reaching $3.5 billion in the three months through September.

Buffett, 94, has used some of the cash hoard to repurchase some of its own stock, though even that had become costlier recently. Shares of Berkshire have gained 25% this year, boosting its market value to $974.3 billion. Its market capitalization eclipsed $1 trillion for the first time on Aug. 28.

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