International Business Machines Corp. (ticker: IBM) shares closed the week down more than 3 percent after Berkshire Hathaway Inc. (BRK.A, BRK.B) CEO and billionaire investing icon Warren Buffett revealed he has lost confidence in the old-school tech firm. In an interview ahead of Berkshire’s annual shareholder meeting in Omaha this weekend, Buffett revealed that he has already sold a third of Berkshire’s IBM shares in 2017.
“I don’t value IBM the same way that I did six years ago when I started buying,” Buffett said in an interview with CNBC. “I think if you look back at what they were projecting and how they thought the business would develop, I would say what they’ve run into is some pretty tough competitors.”
Buffett said that he began selling IBM shares after the stock hit $180. As of the end of 2016, Berkshire held 81.2 million shares of IBM stock. Based on those numbers, a third of Buffett’s stake would represent roughly 27 million shares of stock he has sold in the past three months. That selling pressure may be largely responsible for IBM’s 14 percent decline since March 1.
Even after the large dump, Berkshire theoretically still holds roughly 54 million shares of IBM worth more than $8.3 billion. Investors will be watching Buffett’s comments at the shareholder meeting closely for any indication that he intends to continue liquidating his remaining position.
Buffet caught investors by surprise back in 2011 when he first revealed his stake in IBM.
“We will not go into business where technology which is way over my head is crucial to the investment decision,” Buffet once wrote. After a long-held aversion to technology stocks, Buffett seems to have softened his stance in recent years with his 2011 investment in IBM and subsequent investments in Apple Inc. (AAPL) and Sirius XM Holdings Inc. (SIRI).
IBM investors will have to wait until Berkshire’s next Form 13F to get the details of the IBM sales. Buffet paid an average price of around $170 per share for Berkshire’s IBM stake. It appears that after holding IBM for more than six years, Buffet made…
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