According to Bloomberg Warren Buffett, who announced plans to repurchase Berkshire Hathaway Inc. (BRK/A) shares for the first time in four decades, said he won’t pay full value for the stock.
“If I can buy dollar bills for 90 cents, I’ll buy them,” Buffett, 81, said today at Fortune magazine’s Most Powerful Women conference in Laguna Niguel, California. “I want to warn the people that are selling to me that I believe I am buying their dollar bills for 90 cents.”
Buffett targeted a new use for Berkshire’s cash after the firm’s shares plummeted to a 20-month low in September. Buffett, Berkshire’s chief executive officer since 1970, previously used profits to buy companies and securities issued by other firms. Omaha, Nebraska-based Berkshire may have the capacity to buy back $15 billion of stock, Jay Gelb, an analyst with Barclays Plc, said in a Sept. 26 research report.
“For the indefinite future, if we can buy our stock at something of a discount from its real value we’re going to do it,” Buffett said. “If I can find something else even cheaper I may be doing that too.”
In case you've forgotten, Berkshire Class A shares slid under $100,000 on Sept. 22 for the first time since January 2010. The company’s catastrophe reinsurance business posted a loss in the first half on claims from Japan’s costliest earthquake. Buffett’s equity-derivative bets have been pressured by declines in stock markets worldwide….
Find out more at http://www.bloomberg.com/news/2011-10-04/buffett-likens-buyback-to-getting-dollar-bills-for-90-cents.html
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