Abel's Ownership Stake

Barrons piece:

Warren Buffett’s Likely Successor Owns Little Stock in Berkshire Hathaway
https://www.barrons.com/articles/warren-buffett-greg-abel-be…

Ownership of Berkshire Hathaway BRK.B stock is a big part of the culture at the sprawling conglomerate, but Greg Abel, the likely successor to Warren Buffett as CEO, appears not to have bought into that.

In a surprise to some Berkshire Hathaway (BRK/A, BRK/B) watchers, Abel sold a 1% stake in the company’s big utility unit, Berkshire Hathaway Energy, back to the subsidiary for $870 million in cash, rather than getting Berkshire stock.

Looks like he’ll have a better buying opportunity today…

I will be concerned if Abel doesn’t have a serious ownership stake in Berkshire long-term. Anyone else?

2 Likes

“I will be concerned if Abel doesn’t have a serious ownership stake in Berkshire long-term. Anyone else?”

for sure. Also concerned about how he will fare in the top job.

7 Likes

Not convinced BRK will be the same or similar post Buffett after 3 to 5 years, there’s only one WEB and it’s his baby.

I also wasn’t impressed by Abel at the AGM. Taking cash instead of stock adds weight to this view.

Adds up to my trimming Berkshire to diversify into other super investor favourites in the US and China.

4 Likes

not owning much or buying is a bad look. Let’s hope Mr. Abel puts some serious cash into Berkshire.

3 Likes

not owning much or buying is a bad look. Let’s hope Mr. Abel puts some serious cash into Berkshire.

Right. Running Berkshire should be a job, not just a part-time hobby.

I think we should give Abel some time to buy BRK stock in the open market. He just cashed out his BHE stock in June though I am not sure why he could not exchange it for BRK stock in a tax-free transaction. My guess is that Warren offered him BRK stock exchange for BHE stock based on both BRK’s and BHE’s intrinsic values , not BRK’s market price. So it is possible that Abel chose cash despite the tax hit; he is certainly cashing out of BHE stock at a very nice (by my estimate roughly 2X for energy business, BYD marked-to-market) multiple of book value.

Does anyone know whether Sokol exchanged BHE stock for BRK stock or cashed out BHE stock and bought BRK in the open market?

I am a little concerned about Greg’s performance at the 2022 annual meeting however. Perhaps he was just having an off day. I also don’t think it is ideal for Warren to take up almost all the time at the AM; he should let both Abel & Jain speak and answer more and more at the future annual meetings in my opinion. With all due respect to Warren, Ajit & Greg are really running the day to day businesses today and are the future of BRK.

14 Likes

Does anyone know whether Sokol exchanged BHE stock for BRK stock or cashed out BHE stock and bought BRK in the open market?

David Sokol exchanged his BHE shares for Berkshire shares. Sokol sold off most of that Berkshire stock over time (maybe all of it, he doesn’t have to disclose Berkshire ownership anymore). Sokol used that capital to run his family office / private equity firm Teton Capital, which is where he owned stuff like Davos Brands (Aviation Gin).

2 Likes

Thanks for the Sokol transaction info @nola622!