Berkshire Hathaway Cuts HP Stake to 5.2%



Key Takeaways

  • Berkshire Hathaway has reduced its HP stake to 5.2%.
  • HP shares dip following the news of Berkshire’s reduced investment.

Berkshire’s Reduced Investment in HP

Warren Buffett’s Berkshire Hathaway has significantly reduced its stake in technology company HP to just 5.2%, according to a recent regulatory filing. This change marks a notable shift from Berkshire’s previous investment strategy in the printer and PC maker, with a sell-off streak observed in mid-September through early October. The reduction has led to Berkshire’s stake in HP dropping to about 10% before this latest update.

Impact on HP’s Market Position

Following the announcement, HP’s shares experienced a slight downturn, dipping over 1% in after-hours trading. Despite this, Berkshire Hathaway remains a major institutional shareholder in HP, holding approximately 51.5 million shares valued at around $1.6 billion, based on the closing price of $30.37 on Monday. Among institutional investors, Berkshire stands as the third-largest shareholder, trailing only BlackRock and Vanguard, as per data from FactSet.

HP’s Financial Outlook

HP’s financial outlook has seen recent fluctuations, with the company issuing first-quarter profit guidance below Wall Street expectations, as reported by LSEG. Nonetheless, HP maintains its full-year earnings outlook, suggesting potential recovery in the personal computers market. Berkshire Hathaway’s initial investment in HP was made in April 2022, but the investment hasn’t yielded significant profits, with HP’s stock performance lagging behind the broader market trends.

Berkshire’s Investment Strategy

This move aligns with Warren Buffett’s investment philosophy, where he treats stock holdings as business pieces, often exiting a position entirely once the selling process begins. Buffett’s approach emphasizes the importance of long-term business value rather than short-term market fluctuations. The reduction in HP’s stake by Berkshire Hathaway might signal a strategic shift in the conglomerate’s investment portfolio.


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