In a surprising move, Berkshire Hathaway, led by Warren Buffett, divested its positions in General Motors (GM) and Activision Blizzard in the third quarter, as revealed in a regulatory filing.
General Motors: Berkshire Hathaway sold a staggering 22 million shares in GM during the quarter. This comes as a significant shift since the conglomerate had been holding shares in GM since 2012. However, this marks the fifth out of the last six quarters that Berkshire Hathaway has been selling off its GM holdings. Despite Buffett’s past praises for Mary Barra, the CEO of GM since 2014, the automaker has seen a decline of 16% in its shares this year. On average, GM has only produced annual returns of -0.5% over the past decade, while the S&P 500 Index (SPX) rose by 11.7%, according to FactSet data. Ford Motor Co. (F), which Berkshire Hathaway also did not hold, has also seen negative returns. On the other hand, Stellantis (STLA), the owner of Chrysler, has enjoyed annual returns of 20.8%.
Activision Blizzard: Berkshire Hathaway also parted ways with Activision Blizzard before its acquisition by Microsoft, which was finalized last month.
Apart from these notable exits, Berkshire Hathaway displayed a relatively inactive stance during the third quarter. The firm also reduced its stake in oil giant Chevron (CVX), its fifth-largest holding. At the end of the third quarter, Berkshire Hathaway held $319 billion in equity holdings, $22 billion in bonds, and an impressive $157 billion in cash.
With Warren Buffett’s investment decisions under scrutiny, it remains to be seen how these divestitures will pan out in the long run for Berkshire Hathaway and the companies involved.