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Buffett’s Berkshire Hathaway Lost $50 Billion, Hit By Coronavirus Stock Sell-Off

Billionaire investor Warren Buffett’s Berkshire Hathaway (BRK.A) reported an almost $50 billion loss in the first quarter as the value of its stock holdings portfolio was hit hard by the coronavirus-induced capital market sell-off.

Berkshire’s first-quarter net loss amounted to $49.75 billion, or $30,653 per Class A share compared with a $21.66 billion profit, or $13,209 per share during the same period last year. Incurred investment loss on stocks and other investments amounted to $54.52 billion as the S&P 500 Index plunged 20% in the first quarter.

“As efforts to contain the spread of the Covid-19 pandemic accelerated in the second half of March and continued through April, most of our businesses were negatively affected, with the effects to date ranging from relatively minor to severe,” the company said in a regulatory filing on Saturday.

Berkshire reported $6.1 billion of net equities sales in April compared with the $1.8 billion of net stock purchases it made the first three months of the year. The proceeds from these activities have been primarily reinvested in U.S. Treasury Bills, the company said. It also said it repurchased $1.7 billion of its own stock in the first quarter.

The investment conglomerate has stakes in financial firms including Bank of America (BAC) and American Express (AXP) and other major conglomerates ranging from Apple Inc. (AAPL), Coca-Cola (KO) to Kraft Heinz (KHC).

“Several of our businesses deemed essential have continued to operate, including our railroad, utilities and energy, insurance and certain of our manufacturing, distribution and service businesses. However, revenues of these businesses have slowed considerably in April," Berkshire said. “Other businesses, including several of our retailing businesses and certain manufacturing and service businesses are being severely impacted due to closures of facilities where crowds can gather, such as retail stores, restaurants, and entertainment venues."

Berkshire owns 26.6% of the outstanding shares of Kraft Heinz (KHC). The stock has plunged as much as 37% in the first quarter and closed at $29.38 in U.S. trading on Friday.

Wall Street analysts have a Hold consensus rating on the company’s stock based on 14 Holds, 2 Buys and 1 Sell. The $30.41 average price target indicates a mere 3.5% upside potential in the coming year. (See Kraft Heinz stock analysis on TipRanks). 

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