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Berkshire Hathaway Drops 1/3 of IBM Stakes – Warren Buffett

Berkshire Hathaway Drops 1/3 of IBM Stakes

Warren Buffett, the CEO of Berkshire Hathaway, has often spoken about how little he knows about technology. But despite that, his company was known to hold major stakes in a couple of tech companies: Apple and IBM. Although the Apple purchase is recent, Buffett has had stock in IBM since 2011, after he began touring the IT departments of the various companies he owned.

However, according to news briefs, Berkshire Hathaway has begun to drop its interest in IBM and sold off around 1/3 of its more than 81 million shares in the first quarter of the year. According to Buffett, despite the company’s attempt to refocus on new technologies like cloud computing, it has simply not done as well as he would have liked.

“I don’t value IBM the same way that I did six years ago when I started buying it,” Buffett told CNBC. He said that he has “revalued it somewhat downward.”

Unsurprisingly, Buffett’s decision to sell around 25 million shares caused IBM’s price to fall around 2.5% at close when the transaction was announced.

Overall, IBM’s earnings performance has been lackluster over the years, and the company has had trouble reinventing itself in the wake of the quick changes in technology. In fact, according to USA Today, the latest profit report for IBM was its 20th straight quarter of revenue decline.

Prior to the sale, IBM was Buffett’s third largest stock holding. The company reportedly held around 8.5% of all outstanding stock in IBM.

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