Berkshire Hathaway Reduces Stake in HPInc.

Berkshire Hathaway continues to reduce its stake in HPInc., the maker of printers and personal computers. In recent days, Berkshire sold 4.6 million shares of HPInc., worth approximately $118 million. This move aligns with Berkshire's strategy of gradually reducing its investment in the company.

Recent Sales Details

The sales took place from Monday through Wednesday, with an average price of around $26 per share. After these sales, Berkshire now holds 106 million shares of HPInc., with a total value of approximately $2.7 billion, representing a 10.7% stake in the company.

Steady Reduction of Stake

Berkshire has been steadily reducing its stake in HPInc. since September. Prior to these sales, Berkshire held around 120 million shares of the company. The recent sales are the first since Berkshire completed its acquisition of the HPInc. stock in April 2022. Market experts speculate that Berkshire's CEO, Warren Buffett, may continue to decrease the company's investment in HPInc.

Berkshire - Active Buyer and Seller

In the past year, Berkshire has made significant adjustments to its equity portfolio, which is worth about $350 billion. These adjustments include selling substantial stakes in U.S. Bancorp and Bank of New York Mellon. Buffett prefers to buy and sell stocks quietly. However, since Berkshire holds a stake of more than 10% in HPInc., it is required to file with the Securities and Exchange Commission (SEC) within two business days of any changes made to its position.

Filings Triggered by Future Sales

Further sales by Berkshire will trigger additional filings with the SEC. Currently, Berkshire still owns 10.7% of HPInc., and to avoid future filings, it would need to reduce its holdings to under 99 million shares, compared to the current 106 million shares.

Analysts' Reaction

Following the initial sale of HPInc. shares, analyst Amit Daryanani from Evercore ISI commented on the challenging quarter that HPInc. experienced, leading to lowered expectations for earnings per share and free cash flow in fiscal year 2023. The recent sales by Berkshire could be linked to these challenges and the channel inventory overhang.

Berkshire's Possible Loss

It is estimated that Berkshire will likely experience a loss on the HPInc. stock sale since it initially acquired the stake at a lower price in the low 30s.