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FRI, MAR 08, 2024
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Berkshire's 'pocketbook' targeted over real estate commissions |
Berkshire Hathaway Energy, the parent of HomeServices of America, the nation's largest residential real estate brokerage, has been added to the list of defendants in a massive national lawsuit challenging home sales commissions.
The lawyer behind the suit, Michael Ketchmark, also represented plaintiffs in a different suit who were awarded $1.8 billion in damages last October.
In that case, a federal jury in Kansas City found the National Association of Realtors and several brokerages, including HomeServices, engaged in a conspiracy to inflate commissions in Missouri, Kansas, and Illinois by requiring sellers to pay roughly 3% of a property's sales price to brokers representing buyers.
He tells The New York Times, "Berkshire Hathaway is the leader of the pack. It’s much bigger than N.A.R. "The money didn’t flow to N.A.R. from this conspiracy. The money flowed to the corporate coffers of Berkshire Hathaway.
"If you want to bring about change in corporate America, hit them in the pocketbook. And that’s exactly where this is aimed." |
Bloomberg via Getty Images |
The Wall Street Journal notes that Berkshire's enormous pocketbook (including $168 billion in cash) makes it a very tempting target. While the damages in the Missouri case could be tripled to more than $5.3 billion under U.S. antitrust law, the NAR had total assets of only $1 billion at the end of 2022.
Berkshire and HomeServices had no comment for the Times and Journal, but in its annual report last week, Berkshire said HomeServices plans to "vigorously appeal" the Missouri judgment, a process that "could take several years." |
Berkshire adds to satellite radio stock play |
Berkshire Hathaway paid $107.5 million this week to add another 3.7 million shares of Liberty Media's Sirius XM tracking stocks (LSXMA and LSXMK) to its portfolio.
As of Wednesday, when Berkshire made it most recent SEC filings, it held a total of 75.9 million shares with a market value of $2.3 billion. More than 16% of the position, 12.5 million shares, has been purchased for a total of $375 million during 15 trading days since the start of the year. |
The average price paid in its latest purchases on Monday through Wednesday is $29.98, the lowest it's been since the first two days of January, The person making the buys, (probably portfolio manager Ted Weschler), appears to be trying to take advantage of a price differential between the tracking stocks and shares of Sirius XM Holdings (SIRI).
As part of a reorganization expected to close in this year's third quarter, each tracking stock share will be exchanged for 8.4 shares of a new SIRI stock. Based on current prices, Berkshire's $2.3 billion of tracking stock would be exchanged for $2.7 billion of SIRI, a gain of around 17%.
Berkshire isn't the only player in this game. Some big hedge funds are buying the tracking stocks, and some are also shorting SIRI, although that's hard to do because there are not many shares available. |
It's also risky. SIRI shares are down 24% year-to-date, and could fall more, both before and after the exchange date. |
PacifiCorp ordered to pay another $42 million for wildfires |
An Oregon jury ordered Berkshire Hathaway Energy's PacifiCorp this week to pay $42 million to 10 plaintiffs affected by wildfires in 2020.
That's in addition to the $175 million in judgments for 26 plaintiffs after a jury verdict last June that PacifiCorp's equipment contributed to the blazes after the utility failed to cut power to its customers despite warnings from fire officials. PacifiCorp tells the AP it has already settled hundreds of claims and "remains committed to settling all reasonable claims for actual damages under Oregon law." Many other suits over wildfires in Oregon and California are pending, leading Berkshire to estimate its utilities could be facing at least $8 billion in claims. |
A helicopter carries water as trees burn in Oregon, September 18, 2020. REUTERS/Adrees Latif |
In his annual letter to shareholders two weeks ago, Buffett wrote, "It will be many years until we know the final tally from BHE’s forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western states." |
Mizuho worries Apple could be 'slaughtered' if more shares are sold |
Apple's share price, already down 11% so far this year, could go sharply lower if Berkshire Hathaway's next 13F portfolio disclosure in mid-May shows that during this year's first quarter it well beyond the modest 1% reduction it reported for last year's fourth quarter.
A Mizuho analyst is quoted as saying, "I could see [Buffett] selling sooner or later. In fact, I would not be surprised if he is selling right now," given that he is already "up a ton on his stake" and the stock "feels in trouble" now. "He knows when that 13-F comes out showing he started to sell, that [Apple] shares will get killed as retail investors rush for the exit." |
The most recent sizable reduction in Berkshire's Apple stake was a nearly 10% drop in the second half of 2020, a move that Buffett later conceded was "probably a mistake."
And at The Motley Fool, Stephen Wright suggests the 10 million share reduction in last year's fourth quarter may have been taken from the 20 million shares held by Gen Re subsidiary New England Asset Management that were first included in Berkshire's 13F early last year.
If so, the move may not have been Buffett's decision and doesn't reflect any souring on his part. |
BUFFETT AROUND THE INTERNET Some links may require a subscription | |
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HIGHLIGHTS FROM THE ARCHIVE |
Buffett’s advice on charitable giving (2007) |
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Mar. 8, 2024 |
Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of December 31, 2023 as reported in Berkshire Hathaway’s 13F filing on February 14, 2024, except for: The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. |
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here.
Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website. -- Alex Crippen, Editor, Warren Buffett Watch |
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