Buffett’s Berkshire Hathaway speeds up stock buybacks

By Jonathan Stempel

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc has stepped up its pace of stock buybacks, repurchasing more than $1.8 billion of its own stock this year.

In its proxy filing on Friday, Berkshire said that as of March 8 it had the equivalent of 1,455,698 Class A shares outstanding, down 4,035 from year end and 2,537 from Feb. 13, reflecting the repurchases.

Berkshire’s repurchases have also included Class B shares, which normally cost about 1/1500th as much as Class A shares.

The Class A shares closed on Friday at $442,765, their low for the year, while the Class B shares closed at $293.51, near their low.

Berkshire’s buybacks follow nearly $60 billion between 2020 and 2022.

They suggest that Buffett and fellow billionaire Vice Chairman Charlie Munger, who handle major capital allocation decisions, still view Berkshire’s stock as undervalued, and repurchases as a prudent use of the company’s cash.

Berkshire ended 2022 with $128.6 billion of cash and equivalents.

The Omaha, Nebraska-based conglomerate owns dozens of businesses including Geico car insurance and the BNSF railroad, and stocks such as Apple Inc and Bank of America Corp. Buffett owns 15.6% of Berkshire’s stock.

In his Feb. 25 annual letter to shareholders, Buffett defended buybacks, calling someone who views all repurchases as harmful “an economic illiterate or a silver-tongued demagogue.”

The comment appeared to criticize the White House and some Democrats who would prefer that companies use available cash to reinvest in their businesses.

Buybacks are subject to a 1% excise tax, which President Joe Biden has proposed quadrupling.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)