Buffett’s Berkshire Buys $1.2 Billion in Stock From Single Investor

Wednesday, 12 Dec 2012 09:53 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Warren Buffett's conglomerate Berkshire Hathaway Inc. bought back $1.2 billion in stock from the estate of an unnamed investor, the company said on Wednesday, one day after Buffett advocated for a higher estate tax when the wealthy die.

Berkshire also raised the threshold for future share buybacks to 120 percent of book value from 110 percent — the level it chose when it first approved a repurchase program in September 2011.

The anonymous purchase was done at $131,000, or 117 percent of book value. Berkshire shares have closed above, or within $1,000 of, that mark every trading day since November 19.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

Berkshire said it bought 9,200 Class A shares from "the estate of a long-time shareholder," whom it did not name. Buffett's assistant did not immediately respond to a request for comment on the shareholder's identity. The shares represent 1 percent of Berkshire's Class A stock.

Buffett was always loathe to offer share buybacks and consented to it last year only after Berkshire hit historically low valuations. In its most recent quarterly filing, Berkshire said it had not made any repurchases in the first nine months of 2012, after spending just $67.5 million on buybacks in 2011.

"I don't expect a significant repurchase program to be announced as (Buffett) is clear that he is in acquisition mode," said Michael Yoshikami, founder and CEO of Destination Wealth Management and a long-time Berkshire investor.

Berkshire's Class A shares rose after its announcement, up 2.8 percent at $134,500.

Based on the company's book value at the end of the third quarter, the buyback threshold would stand for now at $134,061.60. The stock has traded below that level for most of this quarter.

DEATH AND TAXES

The repurchase came less than a month ahead of the looming fiscal cliff, automatic tax hikes and spending cuts set for January 1 that the White House and members of Congress have been negotiating to avoid.

Among other levies, the estate tax is expected to rise in the New Year package by as much as 20 percentage points, which may have spurred the anonymous shareholder to sell now.

Buffett himself was one of the signers of an open letter released on Tuesday that called for a lower starting point for the tax and a higher taxation rate, beginning at 45 percent.

"We believe it is right to have a significant tax on large estates when they are passed on to the next generation. We believe it is right morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power," the 33 signers wrote in the letter released by the campaign, United for a Fair Economy.

Buffett has been publicly campaigning for more than a year for higher taxes on the wealthy, even lending his name to a proposal called the "Buffett Rule" that failed in Congress.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Harvard Study: Treasury, Fed Tactics Clashed During Crisis

Tuesday, 30 Sep 2014 13:10 PM

Policies pursued by the U.S. Treasury during the 2007-2009 financial crisis undercut the Federal Reserve's efforts to st . . .

Murdoch's News Corp. to Buy Parent of Realtor.Com for $950 Million

Tuesday, 30 Sep 2014 10:07 AM

News Corp. is spending about $950 million to buy the online real estate business Move Inc. in a deal that aims to speed  . . .

Steve Case: eBay's Split With PayPal Could Make Both Takeover Targets

Tuesday, 30 Sep 2014 12:36 PM

After months of prodding by activist investor Carl Icahn, eBay has decided to split PayPal and the rest of the company i . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved