Berkshire Hathaway has recently sold 4.8 million shares of HP Inc., totaling approximately $130 million, according to a Form 4 filing with the Securities and Exchange Commission.
Previous Sales
This comes after Berkshire previously sold 5.5 million shares of HP Inc., valued at around $160 million from September 11th to September 13th.
Current Stake and Interest
Currently, Berkshire Hathaway owns a stake of 110.6 million shares in HP Inc., which is worth $3 billion. This stake represents an 11.2% interest in the company. On Friday, HP’s shares closed at $26.77, experiencing a marginal decrease of 0.1% during the session.
Recent Sales Details
The most recent sales took place from Wednesday through Friday, with an average price per share of around $27.
Accumulated Stake and Future Plans
Berkshire Hathaway initially acquired the stake in HP Inc. in early 2022 and these recent sales are the first since the company completed its acquisition of the stock in April 2022. Some speculate that these sales could indicate Berkshire CEO Warren Buffett’s intention to further reduce the HP stake. Buffett oversees the company’s substantial equity portfolio which currently stands at approximately $350 billion.
Previous Reductions
In addition to the HP Inc. stake, Buffett has previously reduced significant holdings in U.S. Bancorp (USB) and Bank of New York Mellon (BK) in the past year.
Berkshire’s Stock Trading in HP Raises SEC Filing Requirements
Berkshire Hathaway, the investment conglomerate led by Warren Buffett, has been known to prefer making stock transactions quietly. However, due to its ownership stake of over 10% in HP, Berkshire must file with the Securities and Exchange Commission (SEC) within two business days of making any changes to its position.
This means that any future sales made by Berkshire will trigger these filings, considering the significant size of Berkshire’s stake in HP. To avoid having to file for purchases or sales, Berkshire would need to reduce its holding to below 99 million shares of HP, which is currently at 110 million shares.
Recent reports suggest that Berkshire may be incurring a loss on its sale of HP shares, as it had acquired these stakes at a price estimated to be in the low $30s.
Shortly after the initial sale of HP shares, Amit Daryanani, an analyst at Evercore ISI, expressed concerns about HP’s financial outlook. Daryanani noted that HP had revised its expectations for earnings per share and free cash flow for the fiscal year 2023 due to macroeconomic challenges and inventory overhang in its distribution channels.
Since then, market analysts and observers have speculated about the possibility of further sales by Berkshire in relation to its HP holdings.
In recent years, Berkshire has displayed increased activity in buying and selling stocks within its equity portfolio, signaling a shift from its previous approach.
