It was reported on the 5th (local time) that Berkshire Hathaway's stock price fell by 14% three months after Chairman and CEO Warren Buffett announced his retirement plan last May.

According to the UK Financial Times (FT), Berkshire Hathaway Class A shares fell by 14% over approximately three months starting from May 2. May 2 was the last trading day just before former CEO Buffett announced he would transfer management rights to Vice Chairman Greg Abel. The stock price was recorded at $694,750 (966 million KRW) as of the closing price on the 5th.

The decline in Berkshire Hathaway's stock price was observed as one of the largest drops over a three-month period since 1990. It is considered an unusual level, except for the early phase of the COVID-19 pandemic when insurance and financial stocks plummeted, worsening overall returns.

The stock price underperformance is even more pronounced when compared to the market returns. During this period, the dividend-inclusive return of the US S&P 500 index reached 11%. This year, semiconductor stocks themed around artificial intelligence (AI), led by Nvidia, the largest market capitalization, have driven the strong performance of the New York Stock Exchange.

In fact, concerns about Berkshire Hathaway being left out amid this year's tech stock rally were cited as one of the factors worsening investor sentiment. This was because CEO Buffett mainly focused on undervalued value stocks. Another reason pointed out was that CEO Buffett stopped buying back company shares in May 2024 due to the overvaluation of the company's stock.

FT added that the entity driving the recent stock price decline is unknown. It is expected that who holds how many Berkshire Hathaway Class A shares, once considered a 'prince stock' worth about $810,000 per share (approximately 1.126 billion KRW) in early May, will be revealed along with the second quarter hedge fund holdings disclosure at the end of this month.

However, Berkshire Hathaway is reported to have posted strong second-quarter results among them. Most of Berkshire Hathaway's invested sectors, including railroads, utilities, manufacturing, services, and distribution, achieved favorable performance. Operating profit increased by 8% year-on-year excluding exchange rate fluctuations.

Meanwhile, CEO Buffett is observed to be maintaining a cash reserve strategy. He continued a net selling trend for the 11th consecutive quarter, including selling some shares of Apple, a stock he loves. As of the end of June, the cash holding ratio grew to 30% of total assets. However, this is slightly lower than the record high in the first quarter. CEO Buffett doubled Berkshire Hathaway's cash holdings throughout 2024.