aws Posted July 8, 2020 Posted July 8, 2020 So lets say BRK purchased some Markel shares. Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares? Weird question but just curious. It only works when there is a business involved, and the business has to be a substantial part of the total deal (I think at least one third of the total deal value). In the Graham deal Berkshire bought a TV station and obviously they bought Duracell in the P&G deal. It's probably only worth bothering when you have one side with a very low cost basis in the shares so the tax savings are material to the overall deal size.
rolling Posted July 8, 2020 Posted July 8, 2020 So lets say BRK purchased some Markel shares. Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares? Weird question but just curious. It only works when there is a business involved, and the business has to be a substantial part of the total deal (I think at least one third of the total deal value). In the Graham deal Berkshire bought a TV station and obviously they bought Duracell in the P&G deal. It's probably only worth bothering when you have one side with a very low cost basis in the shares so the tax savings are material to the overall deal size. https://corporatefinanceinstitute.com/resources/knowledge/deals/cash-rich-split-off/
jwelborn93 Posted July 9, 2020 Posted July 9, 2020 The shutdown of the DAPL pipeline in the Bakken should be very positive for BNSF going forward. They have most of the capacity in the region and crude rail capacity will likely double if the shutdown remains in place to transport the marginal barrel. Railing crude has historically been the most profitable end market for the rails from a margin perspective.
gfp Posted July 10, 2020 Posted July 10, 2020 WSJ has an article about the OXY warrants that Icahn hatched up. I'm not sure they have it 100% correct as it relates to the Berkshire security's protections against dilution. They also seem to miss that OXY has to pay Berkshire 9%, not 8%, when paying the dividend in stock. Will have to take a peek at the filings for the OXY Berkshire preferred after I walk the dog https://www.wsj.com/articles/oxys-sweetener-a-bitter-pill-for-warren-buffett-11594378801
CorpRaider Posted July 10, 2020 Posted July 10, 2020 I agree. My impression reading the article was, "yeah BRK is really hurt by raising capital that is subordinated to the preferred in this environment." ::)
physdude Posted July 10, 2020 Posted July 10, 2020 My impression, "yeah BRK is really hurt by raising capital that is subordinated to the preferred in this environment." That is sarcasm, right? (I think it almost definitely is, but just wanted to make sure)
LearningMachine Posted July 10, 2020 Posted July 10, 2020 My impression, "yeah BRK is really hurt by raising capital that is subordinated to the preferred in this environment." That is sarcasm, right? (I think it almost definitely is, but just wanted to make sure) I'm thinking it actually increases the value of Buffett's investment in senior securities in OXY with (1) no negative impact from dilution of subordinated securities and (2) positive impact from lowering the likelihood of OXY filing for bankruptcy with the new money.
bizaro86 Posted July 10, 2020 Posted July 10, 2020 I agree. My impression reading the article was, "yeah BRK is really hurt by raising capital that is subordinated to the preferred in this environment." ::) Aren't they just distributing 7 year warrants to shareholders? I doubt that results in any new equity capital on their balance sheet until the 7 years are up. And not at all if they end up distressed before that. But it would dilute some of the conversion upside. If this was a rights offering where they sold new shares for cash I'd agree it was great for the prefs, but that isnt my read of what's happening.
nickenumbers Posted July 14, 2020 Posted July 14, 2020 Why do we think Ajit Jain sold some BRK shares for just under $1MM? [info reported on Dataroma as insider transaction.] ≡ 08 Jul 09:42 BRK.A BERKSHIRE HATHAWAY INC JAIN AJIT Vice Chairman 01 Jul 2020 Sale 5,600 177.735 995,316 I * D/I = Direct / Indirect * 10% = Entity with 10% or higher ownership stake * A = Amendment Filing (SEC Form 4/A)
gfp Posted July 14, 2020 Posted July 14, 2020 He did not. His foundation, the Jain Foundation, sold the shares. Presumably to make donations, fund research, be charitable, meet minimum requirements to remain a tax exempt foundation, etc... https://www.sec.gov/Archives/edgar/data/1067983/000172845120000003/xslF345X03/primary_doc.xml Why do we think Ajit Jain sold some BRK shares for just under $1MM? [info reported on Dataroma as insider transaction.] ≡ 08 Jul 09:42 BRK.A BERKSHIRE HATHAWAY INC JAIN AJIT Vice Chairman 01 Jul 2020 Sale 5,600 177.735 995,316 I * D/I = Direct / Indirect * 10% = Entity with 10% or higher ownership stake * A = Amendment Filing (SEC Form 4/A)
nickenumbers Posted July 14, 2020 Posted July 14, 2020 Maybe he wanted to buy a boat?? Okay, I chuckled at that! You never know..
John Hjorth Posted July 14, 2020 Posted July 14, 2020 Maybe he wanted to buy a boat?? Okay, I chuckled at that! You never know.. #metoo! [ : - D] -Well, with a salary of USD 19 M for 2019 [including a bonus of USD 3 M or something like that], I suppose you "just" swipe some plastic if you want to buy "a boat" [not a yacht].
rb Posted July 14, 2020 Posted July 14, 2020 John, my friend, that only happens in the movies. In reality they don't let you swipe plastic. I bought a car a couple of years ago and they only let me swipe plastic for $5,000. I had to bring paper for the rest. This wasn't a corner store place either, it was a BMW dealership. Full disclosure: I gave them a certified cheque. I didn't ask if also took Berkshire stock certificates.
John Hjorth Posted July 14, 2020 Posted July 14, 2020 rb, You're right. The last time I bought something tangible & expensive [for my part: a car] I paid with a certified cheque, too. Later, I have at my broker bought Berkshire shares in one transaction above that figure in the car transaction - the difference is the broker already knows the cash is present and available.
nickenumbers Posted July 14, 2020 Posted July 14, 2020 Every time I have bought a yacht they have accepted a credit card for the full purchase price!! ::)
John Hjorth Posted July 14, 2020 Posted July 14, 2020 Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ] - - - o 0 o - - - Now back to Buffett/Berkshire - General news.
Jurgis Posted July 14, 2020 Posted July 14, 2020 Every time I have bought a yacht they have accepted a credit card for the full purchase price!! ::) Same for me. I think the other guys are just using crappy value investor CCs. ::)
Guest longinvestor Posted July 15, 2020 Posted July 15, 2020 https://finance.yahoo.com/news/navistar-develop-self-driving-trucks-120000766.html McLane is co-investing in the development of self-driving truck network/ technology. Imagine that, a lowly Berkshire subsidiary investing in technology? Not supposed to be that way, who’d have thunk?
mcliu Posted July 15, 2020 Posted July 15, 2020 Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ] - - - o 0 o - - - Now back to Buffett/Berkshire - General news. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html
Jurgis Posted July 15, 2020 Posted July 15, 2020 Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ] - - - o 0 o - - - Now back to Buffett/Berkshire - General news. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Charlie Munger has a yacht. https://channelcatcharters.com/about.html Although it is a cheapskate yacht really.
Parsad Posted July 15, 2020 Posted July 15, 2020 Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ] - - - o 0 o - - - Now back to Buffett/Berkshire - General news. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Charlie Munger has a yacht. https://channelcatcharters.com/about.html Although it is a cheapskate yacht really. Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ] - - - o 0 o - - - Now back to Buffett/Berkshire - General news. Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html Both Munger and Pattison use it more for either their customers/clients or charitable events. Cheers!
Munger_Disciple Posted July 15, 2020 Posted July 15, 2020 Is it my impression or Munger's yacht looks a bit dated now especially compared to Pattinson's?
fareastwarriors Posted July 15, 2020 Author Posted July 15, 2020 U.S. judge confirms Berkshire Hathaway unit's 643 million euro award against German pipemaker https://www.reuters.com/article/us-berkshire-buffett-arbitration-award/u-s-judge-confirms-berkshire-hathaway-units-643-million-euro-award-against-german-pipemaker-idUSKCN24G37Q?il=0
marazul Posted July 15, 2020 Posted July 15, 2020 Thank you for the information. In a case like this, how does the recovery work. I guess they already distributed the cash to the shareholders at the time of the acquisition. Not sure how it works, my guess is this will be pretty difficult to recover but I have no experience in the field.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now