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Berkshire Hathaway continues to increase investment in the technology sector
Investment holding company Berkshire Hathaway made a deal with computer equipment manufacturer HP from the United States. Warren Buffett’s company bought 11.4% of the corporation’s shares, the total amount of the acquisition amounted to 4.2 billion dollars. In total, the package includes more than 121 million securities.
News about the purchase caused the stock exchange growth in interest in HP shares, and at the postmarket, their value has increased by 10% to 38 dollars per unit. Due to the deal, Berkshire Hathaway became the largest holder of the corporation’s shares, before that 11% of the securities belonged to the Vanguard Group, and 10% belonged to BlackRock.
According to representatives of Berkshire, the holding seeks to invest in businesses that demonstrate an economic advantage in the long term. When choosing a company to invest in, Warren Buffett’s team is guided by the methods of management, their experience, and their desire to develop. In the case of HP Corporation, all points converged – the manufacturer of computer and office equipment is showing excellent growth and has every chance to scale the business in the future. At the same time, Berkshire Hathaway notes that HP shares are undervalued, especially if their value is considered in terms of expected profits.
The American manufacturer has become another company in the technology sector that Berkshire is interested in. Earlier, the holding acquired the securities of Activision Blizzard, IT giant Apple, and Snowflake. Apple, along with BNSF’s railroad business and the holding company’s insurance business, brings it the bulk of its capital. Steve Jobs Corporation in the Berkshire Hathaway portfolio accounts for 43%, and the value of the shares is estimated at a record $90 billion.
It should be noted that the investment giant for about six years did not sign deals to buy businesses, which allowed it to accumulate almost $147 billion of free money. After a break, Berkshire Hathaway changed its strategy and in the spring of this year announced the acquisition of Alleghany, a company that provides services in the insurance sector. The amount of the deal is almost 12 billion dollars.
In February, Berkshire Hathaway announced it was buying shares in Brazilian digital bank Nubank, a deal that cost $1 billion. Last June, the latter received $750 million in investments, after which its valuation rose to $30 billion. Berkshire Hathaway became the key investor. Thus, the holding expands its presence in the sector of crypto-assets, which it considers an extremely promising direction. At the same time, the company is trying to reduce investments in the traditional financial area. It got rid of some shares of payment systems Visa and Mastercard and sold securities totaling $3 billion.