Berkshire Hathaway
was a big buyer of
Occidental Petroleum
stock in recent days, purchasing 10.5 million shares for about $590 million.
It now holds a stake of 238.5 million shares worth $13.6 billion in the energy company, or a 27% interest, according to a form 4 filing with the Securities and Exchange Commission late Wednesday.
The purchases were made from Monday through Wednesday with Berkshire paying an average price of about $56 a share.
Berkshire Hathaway CEO Warren Buffett took advantage of the recent weakness in Occidental Petroleum’s stock price, which hit a 52-week low Tuesday. These are Berkshire’s first purchases since late October.
The purchases amount to a vote of confidence by Buffett in Occidental and its CEO Vicki Hollub after the company unveiled its $12 billion purchase of the privately held energy producer CrownRock on Monday.
Barron’s wrote earlier Wednesday that a filing of new Occidental purchases could come as early as today.
Barron’s speculated that Berkshire may have felt constrained while Occidental was negotiating with CrownRock and refrained from any open-market buys of the stock. News of the talks surfaced in late November.
The deal hasn’t played well on Wall Street as Occidental stock has fallen about 5% since news of the talks broke last month. The shares gained 3% Wednesday to $57.22.
Some analysts called the price rich and Occidental will take on additional debt to what is the most leveraged balance sheet among its peers to finance the deal. This could make the company vulnerable if oil prices continue to drop but Occidental would benefit if energy prices rise.
The buys in the past three days may be Berkshire’s largest for any three-day period since it began promptly disclosing its purchases of Occidental stock in 2022. As a 10% holder, Berkshire must disclose buys or sells within two business days.
Write to Andrew Bary at [email protected]
Read the full article here