New York, NY, United States (AHN) – Berkshire Hathaway, the investment firm owned by U.S. billionaire Warren Buffett, bought in March $10.7 billion shares in IBM equivalent to 64 million shares.
The Berkshire investment represents an about face from Buffett’s previous policy not to invest in high-tech firms because of the difficulty in predicting which technology business will offer long-term returns.
However, Buffett said he changed his mind after he read IBM’s yearly reports and talked to IT department heads of Berkshire subsidiaries that IBM’s focus is no longer into hardware but providing service.
With the buy-in, Berkshire now has a 5.5 per cent stake in IBM, making the company the second-largest shareholder after investment advisory group State Street, which has holdings of over 64 million shares. >p> Berkshire paid an average of $170 per share, which is 10 per cent lower than the Friday closing price of $187.38.
The public watches where Buffett – listed by Forbes magazine as the world’s third-richest man with a fortune of $50 billion – buys in because of his track record in investing in winning companies.
Besides its investment in IBM, Berkshire also hiked its stake in American bank Wells Fargo, but Buffett did not provide additional details on how much shares his company bought. Berkshire owns about 80 subsidiaries including companies engaged in insurance, railroad operations and utility.
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