Warren Buffett recently earned his nickname of the Oracle of Omaha yet again after dropping shares of Twentieth Century Fox right before news broke of the sexual harassment scandal that has plagued the company and caused the firing of news anchor Bill O’Reilly. Last week, Berkshire Hathaway disclosed that it sold off nearly all of its shares during the first quarter of 2017.
Buffett has stood by several of his more controversial stocks in recent days including Wells Fargo and United Airlines, both of which have had their own various and disastrous problems. However, Buffett is a long term investor and he chose to stick with the companies and weather the storm. With Fox, however, it seems like Buffett’s near precognizance has paid off huge.
According to reports, Buffett owned around 9 million shares of Twentieth Century Fox, which translated in March to around $290 million. After news of the increasingly large sexual harassment scandal, the stock fell more than 14%; a plunge that could have cost Buffett in the ballpark of $42 million if he had still held stock in the company at the time.
There’s no news at the moment as to whether the news of the scandal had any bearing on Buffett’s decision to drop Fox, but the Oracle of Omaha has come out several times with other scandals and condoned CEOs that take quick and appropriate action during a business crisis. Fox’s decision to attempt to dismiss the issue probably hasn’t won any respect from the Berkshire Chairman.
Buffett first started purchasing Fox stocks towards the end of 2014, but the stock has never really been particularly lucrative or even productive. In fact, reports indicate that Buffett would have barely broken even if he had sold Fox at its height—definitely not the kind of value Buffett tends to laud. And, with the most recent scandal and the possibility of the Sky acquisition falling through, Fox isn’t looking so great.
In addition to this adjustment, Buffett made a few other small changes to his portfolio in the first quarter of 2017, including purchasing additional shares of Apple and American Airlines, and dropping IBM.