Tech

Warren Buffett’s Apple bet is worth a record $139 billion – but the investor missed out on another $6 billion by selling shares

Warren Buffett

  • Warren Buffett’s Apple stake jumped in value to a record $139 billion on Tuesday.
  • Berkshire Hathaway would command a $158 billion stake if it hadn’t sold any Apple shares.
  • Buffett’s company has cashed out about $13 billion of stock, missing out on $6 billion in gains.
  • See more stories on Insider’s business page.

Warren Buffett’s Apple stake climbed in value to a record $139 billion on Tuesday, as the iPhone maker’s stock price closed at a new high of $157. The famed investor has more than quadrupled his money on the tech company – but has missed out on an estimated $6 billion by trimming his position.

Buffett’s Berkshire Hathaway spent about $36 billion between 2016 and mid-2018 to amass more than 1 billion Apple shares, adjusted for the 4-to-1 stock split last year. It pared its holding by 12% to 887 million shares by the end of 2020, and that figure was unchanged as of June 30 this year.

The billionaire investor’s company pocketed about $11 billion from selling Apple stock in 2020 alone, and netted another $2 billion or so from its disposals between the third quarter of 2018 and the end of 2019.

However, if Berkshire had left its stake intact, it would be worth $158 billion today – $19 billion more than its current value. Subtract the roughly $13 billion cashed out by Buffett and his team, and they potentially missed out on $6 billion in unrealized gains.

Buffett admitted during Berkshire’s annual shareholder meeting in May that he likely erred by selling Apple stock last year.

“That was probably a mistake,” he said, adding that his business partner and Berkshire’s vice-chairman, Charlie Munger, had advised him not to trim the position.

Apple is easily the largest holding in Berkshire’s US stock portfolio, accounting for 41% of its total value of $293 billion at the end of June. The tech bet is worth more than the next four biggest positions – Bank of America, American Express, Coca-Cola, and Kraft Heinz – combined.

Berkshire’s 5.4% stake in Apple makes it the group’s second-largest shareholder after Vanguard, the index-fund giant. Buffett’s company has received an average of $776 million in yearly dividends from the investment over the past three years.

Unsurprisingly, Buffett has repeatedly sung Apple’s praises. He touted it as “probably the best business” he knows in a CNBC interview last year, and labeled it a “family jewel” in his latest shareholder letter. He also praised Apple CEO Tim Cook as “one of the best managers in the world” at Berkshire’s annual meeting this year, and underlined how much people love Apple products and how indispensable they are.

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