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Warren Buffett Buys $1 Billion Stake In Apple (cnn.com)

Posted by BeauHD on from the lump-sum dept.

An anonymous reader quotes a report from CNN: Berkshire Hathaway, the conglomerate run by Buffett, disclosed in a regulatory filing Monday that it purchased more than 9.8 million shares in Apple during the first quarter. It marks Berkshire's first investment in Apple. Berkshire acquired its position at an average price of about $109 a share. Apple's stock price has since fallen to just above $90, meaning that Berkshire's stake in Apple is now worth about $888 million. The Apple purchase is the second big tech investment by Berkshire, which has been steadily adding to its stake in IBM during the past few years. Until recently, Buffett had been famous for his lack of investments in the tech sector. But Apple fits perfectly in Buffett's wheelhouse. The company is a leader in its market and the stock is extremely cheap, trading for just 11 times this year's earnings estimates. Apple also has a pristine balance sheet, with $232.9 billion in cash. At the end of April, billionaire investor Carl Icahn sold his entire stake in Apple, citing the risk of China's influence on the stock. Last week, Didi, China's ride-sharing service and rival to Uber, announced Apple invested $1 billion in the company. There's been a lot of money shuffling taking place as of late as Apple tries to reinvigorate the market after it had its first earnings decline in more than a decade.

4 of 120 comments (clear)

  1. Why does this matter? by Anonymous Coward · · Score: 0, Insightful

    How does this affect me? Why should I care that some guy who has hundreds of times more money than I ever will has bought a $1 billion stake in Apple? Why is this important to anyone except Warren Buffett? I'll get modded down to -1 for asking this because Slashdot users don't like answering important questions. But this needs to be asked, and I challenge any of you to give me a real answer rather than insulting me. Unfortunately, I don't think anyone here is up to the challenge.

    1. Re:Why does this matter? by tsqr · · Score: 4, Insightful

      How does this affect me? Why is this important to anyone except Warren Buffett? Slashdot users don't like answering important questions. But this needs to be asked....

      It probably doesn't affect you. Why is that important? Sorry; I felt it needed to be asked.

    2. Re:Why does this matter? by shawn2772 · · Score: 4, Insightful

      How does this affect me?

      Maybe it doesn't. That doesn't mean it isn't interesting to many others here.

      Why should I care that some guy who has hundreds of times more money than I ever will has bought a $1 billion stake in Apple? Why is this important to anyone except Warren Buffett?

      I don't know if you should care, but I'll tell you why I care.

      Warren Buffet has proven to be very good judge of companies' long-term prospects. No one seriously believes he's infallible, but his approach has been extremely successful. His vote of confidence in Apple's future is something I would consider very interesting at any time, but it's even more interesting right now because so many people are questioning Apple's future. Having lost Steve Jobs (who was an ass, but obviously did a great job of leading the company to success) and with the company's cash cow showing signs that it may begin to decline, it's not clear whether Apple will continue to be the technology leader[*] that it has been.

      So, what this amounts to is very informed prognostication on the future of an important tech company. To me, that's news for nerds. For nearly anyone interested in technology or the economy, that's stuff that matters.

      But this needs to be asked

      I don't see why, actually.

      and I challenge any of you to give me a real answer rather than insulting me. Unfortunately, I don't think anyone here is up to the challenge.

      I don't much care about challenges, but I also don't make a habit of insulting people, and I don't think I have here.

      [*] I know it's popular on slashdot to argue that Apple isn't a technology leader because their core strength isn't blue-sky innovation, but instead taking obviously-good and somewhat-proven ideas and executing them with great polish and skill. I think that view ignores a lot of real innovation that Apple does in the process of creating their premium products, and ignores the fact that Apple's successful products are often trend-setters, even though they often set the "trend" well after comparable competing products have been on the market for some time.

    3. Re:Why does this matter? by Anonymous Coward · · Score: 0, Insightful

      It's a worrying story because someone smart is betting that Apple has a future rather than being in decline. If you're tech oriented, then it's generally bad news if shitty products are expected to get further entrenched rather than escaped.

      BTW, you're an asshole, so if you get modded down it'll be because of that (just look at your horrible post!), not because of a question.