Business

What will Warren Buffett bet on next?

Tens of thousands of investors are flocking to Omaha this weekend, which can only mean one thing: It’s time for Berkshire Hathaway’s annual shareholders meeting, dubbed “Woodstock for capitalists.”

The attraction has long been the chance to see Warren Buffett and Charlie Munger live, answering audience questions with a time-tested buddy comedy act. But this year’s event will be the first without Munger, who… He died in November He is 99 years old – and comes amid increasing questions about Berkshire after Buffett, who is 93 years old.

Buffett will have a different crew answering questions alongside him on Saturday. Berkshire Vice Presidents Greg Appel and Ajit Jain will be present for most of the day. Shareholders are likely to focus on what Appel, Buffett’s appointed successor as CEO and head of the group’s non-insurance operations, has to say.

In Buffett Annual letter He pointed to investors’ challenges facing Berkshire’s largest companies, including BNSF Railway (low shipment volumes) and its utility business (wildfires). Last month, the company’s massive real estate brokerage, HomeServices of America, also agreed Pay $250 million To settle lawsuits over inflated home sales commissions.

Shareholders might want to hear what Jain, as the mastermind behind the Berkshire biotech, had to say Reinsurance operationshas to be said about the business that makes most of Buffett’s investments possible.

Expect a lot of questions about Berkshire’s signature investments. The company’s stock this year has outperformed shares of Apple (one of Buffett’s largest investments; more on that below), Microsoft and Tesla, as well as the S&P 500.

but with Interest rates stay higher for longer With stocks of many tech giants losing ground, shareholders will want to know where Buffett sees future opportunities. This may include the company’s investments in oil and gas producer Occidental Petroleum and five Japanese trading companies. whose shares rose.

Attendees may also want Buffett to explain what may be his most significant admission in recent years: Berkshire is now so large that it is unlikely to find any major acquisitions — the historical source of Buffett’s huge investment returns — to spend a $163 billion cash pile. on her. “In general, we have no possibility of delivering an eye-catching performance,” he wrote in his annual letter this year.

There may be questions about Buffett’s helpers in picking stocks. Todd Combs and Ted Weschler have been managing parts of Berkshire’s investment portfolio for years. But with them Performance has been delayed for a long time Behind Buffett himself and the S&P 500, according to the Financial Times, raising questions about Berkshire’s future value proposition.

The Justice Department’s investigation into TD Bank is reportedly focusing on fentanyl. Investigators found that Chinese drug traffickers and criminal groups used the Canadian bank to launder hundreds of millions in illicit drug proceeds. The Wall Street Journal reported. The accusation adds to scrutiny of the bank’s anti-money laundering practices, which are at the heart of other regulatory investigations in the United States and Canada.

President Biden makes his first public comments on campus protests. Biden She condemned the violence on Thursday While defending the right to peaceful demonstration. The president is keen to prevent the issue from eroding his support among young voters, but he has been criticized by Democrats and Republicans for not speaking out.

Arguments in Google’s antitrust case end on Friday. The Justice Department says the company competed unfairly in making deals with Apple and other companies to secure search functions on smartphones and web browsers. Google says it has gained its market supremacy through innovation. The trial is The biggest challenge yet to the dominance of Big TechThe judge’s ruling, expected later this year, could change the way Google does business.

After a tough stretch, Apple expects to return to growth in 2024. That, combined with an unprecedented promise of a $110 billion stock buyback, sent shares up more than 6 percent in premarket trading this morning despite… Another drop in sales And great concerns about China.

Apple is the latest tech giant to report results in recent weeks – next up is Nvidia on May 22. Investors are focusing on when huge investments, especially in artificial intelligence, will pay off.

Apple’s journey has been beset by a series of challenges. Including a slowdown in the smartphone and wearables market, intensifying competition in China, and increased regulatory scrutiny, A lackluster start For the Vision Pro headset and questions about AI efforts. (The company is expected to reveal how it will integrate AI into its devices at a developer conference next month.)

Add that up, and sales in the growth king’s stock have declined in five of the past six quarters and shares are down nearly 7 percent this year. a Big question on Wall Street: What will Warren Buffett’s Berkshire Hathaway do with its $157 billion Apple stake?

The most important points mentioned in Thursday’s earnings report:

  • Sales decreased 4 percent year-over-year to $90.8 billion in the fourth quarter, and profits fell by 2 percent to $23.6 billion. Both cuts exceeded analysts’ expectations.

  • Apple reported revenues of $16.4 billion in Greater China, which includes the mainland, Hong Kong and Taiwan. This is higher compared to the previous quarter, driven by the iPhone. Investors are concerned about Apple’s control of the world’s second-largest smartphone market, as consumers turn to local rivals amid a broader crackdown on foreign-made technology.

The company also sought to reassure generative AI Apple is not investing the huge amounts of money that rival tech giants Microsoft, Amazon and Meta are spending on technology. That helped protect its earnings outlook, but also left investors uncertain about its strategy.

Apple CEO Tim Cook tried to express confidence that the company will catch up by spreading artificial intelligence across its devices and services. He told analysts that Apple’s “unique combination of hardware, software and seamless services” — including its in-house chips — would give the company an advantage.


After weeks of anticipation, Sony Pictures Entertainment and Apollo Global Management have made it official: they have officially expressed interest in Purchase of Paramount for approximately $26 billion.

This puts additional pressure on the special committee of Paramount’s board of directors that is evaluating the company’s future. Those directors already face a Friday deadline for exclusive deal talks with Skydance, the studio led by tech scion David Ellison (and favored suitor of Paramount’s controlling shareholder, Shari Redstone).

Will the Sony-Apollo offer be a game changer? Sony has deep experience in the entertainment space, with Apollo providing a significant amount of capital. Sony plans to be the majority shareholder, making Paramount a division within its broader film and television empire, and putting franchises like “Spider-Man” and “Mission: Impossible” under one roof.

However, the $26 billion figure is a preliminary figure: Sony and Apollo have not initiated due diligence, which could impact the final takeover proposal.

There are regulatory concerns Including whether the Sony-Apollo bid would be hampered by federal restrictions on foreign ownership of broadcast networks such as Paramount’s CBS.

Apollo and Sony believe alternative solutions are available; One could have Apollo, which had already been approved for ownership of the network following the acquisition of Cox Media Group, the CBS license. still FCC blocked. A takeover bid for broadcaster Tegna due to Apollo’s role in financing that deal.

what happened after that? Here are some possibilities:

  • Paramount’s special committee signed a deal with Skydance that includes a lower breakup fee and a so-called go-shop clause that allows it to negotiate with Sony and Apollo. This would likely give Skydance an opportunity to match, set up a bidding war, and if Sony and Apollo win, a mandatory payout would be made to Skydance. (It could also result in a lower price than a traditional auction would have achieved, giving already angry shareholders even more reason to complain — or file a lawsuit.)

  • Paramount could let the exclusivity period with Skydance expire at midnight tonight and open its books to Sony and Apollo. This, of course, threatens the duo Sony and Apollo no Make a formal offer – and walk away from Skydance.


– What the NBA is set to get from its new two Broadcast agreements With Disney and Amazon, three times the size of its current deal, according to Bloomberg. The league is also reportedly considering another package with Warner Bros. Discovery and Comcast.


ExxonMobil’s $60 billion purchase of Pioneer Natural Resources is scheduled to close on Friday. The Federal Trade Commission gave its blessing, but the regulator extracted an unusual concession: It barred Scott Sheffield, the former CEO of the shale oil producer, from joining Exxon’s board, saying he had colluded with OPEC to manipulate oil prices.

Accusations can result in criminal charges and the sending of a goosebumps Through an industry where deal making is reaching record levels.

FTC case: an agency He said A review of the merger found that Sheffield’s text messages, public statements and personal meetings with OPEC officials were evidence of his attempt to distort and profit from the global market for oil prices. “American consumers should not pay unfair prices at gas stations just to line the pockets of corporate executives,” said Kyle Mach, vice president of competition at the FTC. The FTC reportedly plans to do so The Sheffield case is referred to the Ministry of Justice.

Pioneer said the FTC doesn’t understand the oil industry. He. She He disputed the accusations but said Sheffield would not do anything to prevent the Exxon deal from going through.

Others accused the regulatory body of overreach. said Eric Grannon, antitrust attorney at White & Case The Wall Street Journal That using the merger review process to target an executive did not amount to “principled antitrust enforcement.”

It’s another case of FTC Chairwoman Lina Khan pushing the limits of antitrust policy. The FTC does not have the authority to bring criminal charges. But in 2021, after she took over as chair, the regulator pledged to expand the company’s referral program to other agencies that do so.

what. In the oil sector, A Scored in the first quarter After bumper 2023. But some analysts warn of a cooldown in activity if the FTC takes a tougher stance on mergers. “Any executive considering a merger will have to worry about being singled out the way Sheffield was,” James Lussier, an analyst at Capital Alpha Partners, wrote in a note to clients on Thursday.

deals

  • Commodities giant Glencore is said to be considering Takeover bid for Anglo AmericanThis could potentially set up a bidding war with BHP. (Reuters)

  • US Steel pushed back Its $14 billion sale to Nippon Steel is expected to close later this year, amid political opposition to the deal. (Bloomberg)

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