Warren Buffet sells all airline stocks, says world has changed for aviation
When Berkshire Hathaway Inc. sold its entire stake in the four largest US airlines in April, the writing on the wall was clear. It suggested that the aviation industry would not be able to sustain through the COVID-19 outbreak.
When Berkshire Hathaway Inc. sold its entire stake in the four largest US airlines in April, the writing on the wall was clear. It suggested that the aviation industry would not be able to sustain through the COVID-19 outbreak. Now, the ace investor has taken an even bigger and alarming step. His company, Berkshire Hathaway Inc on Saturday (May 2) has sold all of its airline stocks.
This came as Berkshire Hathaway reported a net loss of nearly $50 billion in the first quarter amid the COVID-19 pandemic. According to a report from CNBC, the Berkshire Hathaway previously held shares of United Airlines, American Airlines, Southwest Airlines and Delta Airlines, worth over $4 billion last December, but stocks were down this year by 69.7 per cent, 62.9 per cent, 45.8 per cent, and 58.7 per cent, respectively.
“It turned out I was wrong,” the ace investor said on Saturday at the company’s annual meeting adding that he’d made an understandable mistake given the unforeseen downturn in the industry. “The world has changed for airlines,” considering that the industry has been “really hurt by a forced shutdown” due to the coronavirus pandemic, he added.
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"As efforts to contain the spread of the COVID-19 pandemic accelerated in the second half of March and continued through April, most of our businesses were negatively affected, with the effects to date ranging from relatively minor to severe," the statement from the company read.
Addressing the 55th annual general meeting (AGM) of Berkshire Hathaway on May 2, Buffett announced that his conglomerate has sold all its airline stocks, sending an alarming signal to industry devastated by the global pandemic.
The 89-year-old Buffett, popularly known as ‘Oracle of Omaha’ is followed by investors across the globe including India. In India, the two listed airline companies have also taken a hit due to the coronavirus outbreak.
The shares of InterGlobe Aviation have plunged a little over 25 percent so far in 2020 while SpiceJet is down by a little over 60 percent in the same period.
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