Buffett's Change of Heart?…Sells HP Shares Worth 200 Billion Won After One Year

Berkshire Hathaway, led by Warren Buffett, has sold a portion of its shares in the U.S. company Hewlett-Packard (HP), which it had purchased in large quantities last year.

On the 13th (local time), Berkshire Hathaway disclosed to the U.S. Securities and Exchange Commission (SEC) that it sold 5.5 million shares of HP stock. The sales took place over three days from the 11th to the 13th. The selling price was $29 per share, totaling $158 million (approximately 209.6 billion KRW).

This is the first time Berkshire has sold shares since becoming HP's largest shareholder last year. The number of HP shares held by Berkshire decreased to 115.5 million shares ($3.3 billion). The ownership stake dropped from the 12% range to the 11% range.

In April last year, Berkshire accumulated 121 million shares of HP, becoming its largest shareholder. Buffett, known as a symbol of value investing, attracted attention for purchasing a large amount of technology stock that had low business growth potential and little popularity at the time.

[Image source=Reuters Yonhap News]

Foreign media predicted that Berkshire's sale of shares would act as a negative factor for HP's stock price. The U.S. financial media Barron's forecasted, "There is speculation that Buffett may sell more HP shares in the future, making a decline in HP's stock price inevitable." HP shares listed on the New York Stock Exchange (NYSE) closed at $28.33, down 2.11% from the previous session. HP's stock price has been sluggish this year. Compared to the high point in July this year ($33.56), the stock price has fallen by 16% (based on the closing price on this day).

HP's earnings have also fallen short of market expectations. HP's revenue for the second quarter of this year (its own fiscal 2023 third quarter), released on the 29th of last month, was $13.2 billion, down 9.9% from the same period last year ($14.6 billion). This slightly missed market expectations ($13.4 billion). Adjusted earnings per share for the same period plunged 17% to $0.86 from $1.03 in the previous year.

The slowdown in the Chinese economy and weak demand for personal computers (PCs) are cited as causes of the earnings decline. HP is a company specializing in manufacturing PCs and printers. In particular, the PC market experienced a boom during the COVID-19 pandemic due to remote work and online classes, but sales have slowed as demand has decreased since then. According to market research firm Canalys, global PC shipments in the second quarter fell 12% compared to the same period last year.

This content was produced with the assistance of AI translation services.