After long avoiding tech stocks, America’s leading investor, Warren Buffet, has bought over $1 billion worth of Apple stock and backed a buyout bid for Yahoo.
According to regulatory filings, Buffet purchased 9.81 million shares of Apple during the first quarter of this year for $1.07 billion.
He has also partnered with fellow billionaire Dan Gilbert, the founder of Quicken Loans, to finance a bid for Yahoo assets. Those assets include popular services like Yahoo Mail and its news and sports sites.
The surprise announcements created a surge in stock prices for Yahoo and Apple this morning.
Buffet is famous for avoiding technology stocks because he does not invest in companies he does not understand. That position helped his company, Berkshire Hathaway, avoid the dot-com Internet boom and bust.
His avoidance ended during the oil crash of 2014, when he sold 41.1 million shares of Exxon Mobil for $3.7 billion and bought an 8% stake in IBM.
Buffet also announced he would slightly increase his stake in IBM to 81.2 million shares — another surprise, after Berkshire’s annual report showed a $2.6 billion loss on the investment at the end of 2015.
The tech sector has boomed in the last year, with 50% year-over-year growth in heavyweights like Apple (AAPL), Google (GOOG), Microsoft (MSFT), and Facebook (FB).
When asked by The Street if he regretted picking IBM over Apple, he said:
We don’t think that way. We buy businesses we think we understand at prices that we like, and then we hold it for a long time. We usually make money, but not always.”
Yahoo helped millions of people discover email and the internet in the 1990s, but failed to keep pace with changing consumer taste. The stock is currently trading at $37.70 with a market cap of around $35 billion. Yahoo was worth over $254 billion in early 2000.
Source: New York Times