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Berkshire Hathaway reveals $5 billion Occidental stake as Icahn exits -Breaking


© Reuters. FILE PHOTO : The logo representing Occidental Petroleum was displayed on a monitor on the New York Stock Exchange floor (NYSE) in New York on April 30, 2019. REUTERS/Brendan McDermid/File Photo

Jonathan Stempel

(Reuters) -Warren Buffett’s Berkshire Hathaway (NYSE) Inc announced a greater than $5 billion stake Occidental Petroleum Corp.

Berkshire claimed it has 91.2 million Occidental shares or almost 10%, with 61.4 millions bought between March 2 and March 4.

Buffett’s firm disclosed his stake in Friday night filings with the U.S. Securities and Exchange Commission.

Occidental shares rose 45% on Monday, before falling back.

The stock was trading at $53.45, down 4.8% in the early hours of afternoon trading. Occidental was trading below $9 in October 2020.

After Russia invaded Ukraine, oil prices rose. This has sparked fears about supply shortages.

Berkshire holds warrants that allow it to purchase 83.9 Million Occidental shares for $59.62 each or $5 Billion.

They were purchased by Occidental in 2019. In addition, it bought $10 billion of preferred stock – which pays $800m annually in dividends – to fund Occidental’s $35.7bn purchase of Anadarko Petroleum Corp. (NYSE:).

News of Berkshire’s latest investment comes as billionaire activist Carl Icahn (a critic of Anadarko’s merger) last week sold his stake in Occidental.

Berkshire didn’t immediately reply to Monday’s request for comment.

Buffett lamented that equity markets are “not exciting” and wrote to shareholders in February 26th.

A billionaire owns a Omaha, Nebraska-based firm that includes Geico car insurance as well as the BNSF railroad. The company ended December with $146.7 million in cash and equivalents.

The company also invested 350.7 billion in equity such as Apple Inc (NASDAQ 🙂 and Bank of America Corp(NYSE :). American Express Co (NYSE -) and Coca-Cola (NYSE -) Co.

Berkshire didn’t say whether Buffett, or his portfolio managers Ted Weschler and Todd Combs made the latest Occidental Investment. However, larger investments tend to be Buffett’s.

Combs and Weschler have recently combined to invest $34 Billion.

Buffett is now six years old and has not made a significant acquisition. Berkshire also has slowened share repurchases after a $27 billion record in 2021.

James Shanahan, an Edward Jones & Co analyst who rates Berkshire “buy,” in a research report said “we are becoming more optimistic about cash deployment” at Berkshire.

He suggested that Berkshire could acquire 8.9% Berkshire Hathaway Energy, which it did not have.

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