Berkshire brings Delta and Southwest stakes below key 10% level

Berkshire Hathaway sold slices of its stakes in Delta Air Lines and Southwest Airlines this week, but that doesn't necessarily mean Warren Buffett is losing his nerve as airline profits, and stocks, get battered by the coronavirus pandemic.

The sales executed Wednesday and Thursday, and disclosed late today, bring Berkshire's stake in both Delta and Southwest back below 10% of the carriers' outstanding shares. That's the level at which extra regulations kick in, which is why Buffett generally likes to keep Berkshire's stakes in the single-digit range.

In the larger of the two sales, Berkshire's stake in Delta went from 11.2% to 9.2% with its $314 million sale of almost 13 million Delta shares, about 18% of its holdings. The average selling price was $24.19 per share.

News of the sale, perhaps with some help from Delta's after-the-bell projection that Q2 revenues will be down 90%, sent the airline's stock down 11.5% to $19.90 in after-hours trading.

Berkshire's Southwest stake went from 10.4% to 9.9% with the $74 million sale of 2.3 million shares at an average price of $32.22.

Southwest fell 5.0% to $29.01 in after-hours trading.

Almost exactly a year ago, Buffett told our Becky Quick that he "accidentally" allowed Berkshire's Delta stake to top 10% because the airline did a big stock buyback.

When he realized that had happened, Buffett said he "just decided to buy a whole lot more stock."

"Once I'd lost my virginity, essentially, I thought, 'Why stop at one?'"

One of the regulations affecting stakes of more than 10% that Buffett likes to avoid is the requirement that any buying or selling has to be disclosed within days. That's why we learned about these sales so quickly. Berkshire only has to reveal its under-10% stakes once every quarter.

To find out what else has been bought or sold, we'll have to wait until mid-May when Berkshire discloses its holdings as of the end of March.

Coronavirus shuts down See's Candies

Berkshire subsidiary See's Candies has furloughed all of its retail employees as of Wednesday this week after closing all of its 240 U.S. stores and "suspending production and shipping of product" on the advice of local health authorities as part of the battle against the coronavirus pandemic.

The confectioner said its only the second time in its 99-year history there's been an interruption like this one. The first was due to rationing during World War II.

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Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of December 31, 2019, as disclosed in the company's February 14 13F SEC filing.

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-- Alex Crippen, Editor, Warren Buffett Watch