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Buffett set to take megamillion-dollar beating on IBM

By dailymail / Published on Sunday, 11 Jun 2017 11:17 AM / No Comments


Nobody is taking a bigger beating on the slide in IBM shares than Warren Buffett.

The billionaire Oracle of Omaha is the largest shareholder — through his Berkshire Hathaway — of the information technology behemoth, whose stock has been sliding since it recorded its 20th-straight quarterly revenue decline after the closing bell Tuesday.

With the loss of nearly $10 a share in morning trading Wednesday, Buffett’s losses are around $812 million.

Of course, that’s a paper calculation and could change depending on what Berkshire has done since the last regulatory filing period. However, the losses are still substantial.

Berkshire Hathaway’s 81.2 million shares represent about 8.6 percent of total shares outstanding, according to CapitalIQ.

Don’t weep too much for Buffett, though — when considering dividends, he’s made out just fine. The payout so far this year has come to a healthy total of nearly $1.8 billion, assuming his ownership stake hasn’t changed. Excluding dividends, the stock is about $10 below the $170 that is his current breakeven level.

IBM actually topped Wall Street expectations on the bottom line, earning $2.38 a share against estimates of $2.35. However, top-line revenue fell short at $18.16 billion compared with the $18.39 billion anticipated according to Thomson Reuters estimates.

“The portfolio will grow. I am confident that the IBM company will grow again,” IBM Chief Financial Officer Martin Schroeter told CNBC.

—CNBC’s Alex Crippen contributed to this report.

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