Buffett buybacks: Could Berkshire tender stock?

[cubsfan]

Nice explanation - thanks for pointing out the differences.

[longterminvestor]

Here are the share buybacks for the year (Converted A to B using 1 A Share@1500B equivalent):

Q1: 8,406,830

Q2: 2,187,640

Q3: 3,488,363

Q4: 10,140,577

 

Ackman's Pershing Square acquired the following shares in quarters listed:

Q1: N/A

Q2: 3,512,997

Q3: 502,597

Q4: N/A

 

Interesting to see Buffet was competing with Bill Ackman during Q2 & Q3 (less so for Q3) for shares.  Data above supports conclusion shares are tougher to buy back with competition.  It shows in data above.  Anyone else know of other funds acquiring large blocks of BRK during the year 2019? 

 

On the other side of the coin, what funds were net sellers of BRK in 2019?  Large blocks.

[CassiusKing1]

Ol' Uncle Warren better be buying BRK shares hand over fist this week!

[LC]

Ol' Uncle Warren better be buying BRK shares hand over fist this week!

 

5.5MM shares traded hands today as prices went from 219->216, about 1.1B worth of stock, or 20% of the entire amount WB spent in 2019 repurchasing.

 

But apparently there isn't enough volume for WB to make significant market repurchases?  ??? ??? ???

[Swedish_Compounder]

I expect that they buy back a lot of stock right now. Otherwise I will be disappointed.

[LC]

I agree. Already trading volume is 3M shares.

[John Hjorth]

Me too, Swedish_Compounder & LC.

[wabuffo]

Here's a weird (and potentially ominous) coincidence.  In the latest letter, Buffett listed his broker (Mark Millard) and his direct-dial number and solicited offers for shareholders to sell their stock directly to Berkshire Hathaway. 

 

To my knowledge, the only other time Buffett has done that before (broker, phone number, offer to repurchase) was in the 2000 Chairman's letter.  That marked the top of a bull market in March 2000, and the subsequent bear market probably went on for two years and didn't hit a bottom til October, 2002.  The market finally took off in 2003.

 

This year's letter came out this weekend. And the market has swooned.  Does history repeat? 

 

Regardless - it is a very weird and spooky coincidence.

 

wabuffo

 

 

[Viking]

Liquidity is one part of the equation. Price is another. Shares closed today at $207.67 and BV = $174 (at Dec 31). So shares are trading today a little under 1.2 x BV. (Yes, the stock portfolio is down so Dec 31 BV is overstated). Bottom line, if shares continue to fall they will be comfortably under 1.2 x BV which should also get Buffett excited about executing some buybacks in volume (a little like an undersexed guy in a brothel :-)

[John Hjorth]

Mark Millard is a Berkshire Hathaway Vice President [please see inside back cover page of the 2019 Annual Report], and the provided telephone number appears to be Berkshire's main [desk] number [i.e. also used by Mr. Hamburg as contact node related to Press Releases].

[sleepydragon]

Someone shall look at the prints after mkt close to see if there’s any off exchange trades.

I image anyone, including market makers, who want to sell would want to call Omaha first to avoid mkt impact.

So quite possible there will be a lot of off exchange trades.

 

[Jurgis]

Everyone expecting BRK to be buying back tons of stock this week: prepare to be disappointed.

 

Buffett does not like to buy back. And he definitely does not like to buy back when market/stocks drop and he might get bargains in stocks he wanted to buy.

 

My prediction: minimal buybacks; maybe some investments in other stocks/maybe not.

[bizaro86]

Everyone expecting BRK to be buying back tons of stock this week: prepare to be disappointed.

 

Buffett does not like to buy back. And he definitely does not like to buy back when market/stocks drop and he might get bargains in stocks he wanted to buy.

 

My prediction: minimal buybacks; maybe some investments in other stocks/maybe not.

 

Unfortunately I think you're right. It doesn't seem like there is much if any support for BRK, and this seems like a good time to be buying 20% of daily volume to me.

[valueinvesting101]

Buybacks were around 550 million in August 2019 with average price of $197.68 and $300,166.13 for B and A share. So may be it will be repeated as well.

[Guest longinvestor]

When the B shares were created in 1996, the number of shareholders owning BRK doubled to 80,000. (Source: Janet Lowe in the book Damn Right). Recently Buffett has mentioned a million shareholders . How does one find out the current shareholder count? Is it published anywhere? It’s an arcane number but one that should start to go down. Omaha pays attention to it! Perhaps also the proportion that holds long term, as in 5 or more years

[Dynamic]

I think he likened Berkshire to a church with a million seats during the CNBC interview, referring roughly to the number of A share equivalents he doesn't own - very roughly. Simply shuffling the occupants of those seats adds nothing and probably subtracts from the quality of business partner he has.

 

With the number of shareholders in street name now that certificates are virtually obsolete, it's probably an unknown number now, and the official company records are probably full of brokerage firms.

[gfp]

Warren is probably aware of how many Annual Reports the company prints each year.  There would be much higher numbers of "look through" shareholders through funds but I would imagine Berkshire and the transfer agent have a good handle on the number of direct individual holders, including the large number held in street name.  The BNSF deal and associated 50-1 share split probably added a huge number of individual holders.

[Guest longinvestor]

Is the number of shareholders unknowable? If so, what a far cry from the Buffett partnership days! Nameless and faceless shareholders. I’d love to hear Buffett and Munger’s view on this!

 

[alwaysinvert]

The hotline number for selling back shares takes a proper tender offer off the table for at least the next couple of years imo. But maybe you can frame this as a form of "sneaky" tender offer which could potentially give extra large volumes from institutional owners if we ever see significant outflows from the market again.

 

well...

[TREVNI]

Do you think Warren would issue a press release if Berkshire bought back a large amount of stock intra-quarter? Say 2.5%? As a way to signal to shareholders that they're selling at the wrong time. Or does he wait until the 10Q in May?

 

I REALLY REALLY hope they're not holding back at these levels.

[Guest longinvestor]

Do you think Warren would issue a press release if Berkshire bought back a large amount of stock intra-quarter? Say 2.5%? As a way to signal to shareholders that they're selling at the wrong time. Or does he wait until the 10Q in May?

 

I REALLY REALLY hope they're not holding back at these levels.

 

What, when and for how much they buy are really the only core trade secrets of Berkshire. I highly doubt if they go public with this. Beyond reporting mandated by regulations. Doesn’t make any sense for them. If the idiots want to sell Buffett is not going to try to stop them.

[TREVNI]

Do you think Warren would issue a press release if Berkshire bought back a large amount of stock intra-quarter? Say 2.5%? As a way to signal to shareholders that they're selling at the wrong time. Or does he wait until the 10Q in May?

 

I REALLY REALLY hope they're not holding back at these levels.

 

What, when and for how much they buy are really the only core trade secrets of Berkshire. I highly doubt if they go public with this. Beyond reporting mandated by regulations. Doesn’t make any sense for them. If the idiots want to sell Buffett is not going to try to stop them.

 

I agree with you in general. Buffett has a strong aversion to taking advantage of his shareholders. I just wonder if he'd try to send a message not to be too irrational and sell at these levels.

[Guest longinvestor]

Do you think Warren would issue a press release if Berkshire bought back a large amount of stock intra-quarter? Say 2.5%? As a way to signal to shareholders that they're selling at the wrong time. Or does he wait until the 10Q in May?

 

I REALLY REALLY hope they're not holding back at these levels.

 

What, when and for how much they buy are really the only core trade secrets of Berkshire. I highly doubt if they go public with this. Beyond reporting mandated by regulations. Doesn’t make any sense for them. If the idiots want to sell Buffett is not going to try to stop them.

 

I agree with you in general. Buffett has a strong aversion to taking advantage of his shareholders. I just wonder if he'd try to send a message not to be too irrational and sell at these levels.

 

They want Berkshire shareholders to remain rich, no? It surely came from idiot behavior why is today any different?

[woodstove]

My guess is that most of the selling of BRK is index fund and similar auto-managed portfolios, and WEB has been educating shareholders to hold on as business is more or less the same now as two weeks ago.  The unknown for us is whether BRK or others (eg, just in the DJIA) are more advantageous.  Who woulda thought there would be another opportunity! 

[bennycx]

Very unlikely Buffett is buying back stock. Too many bargains around