Buffett told CNBC on Thursday he sold about one-third of Berkshire's 81 million share stake in IBM this year, and no longer values the computer services company as highly as before. Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) owned about 81M IBM shares and has sold around 30M shares this year.
Warren Buffett has cut his stake in IBM by almost a third since the start of the year, after he revalued the computing company "somewhat downward". Other investors "may get impatient".
Buffett also said that IBM is now in a market that has many big strong competitors.
In November of the same year, Drukenmiller said he was shorting IBM shares because of the competitive threat of cloud computing to the company. The company's exposure to catastrophe losses, Buffett's succession and huge capital expenses on account of its railroad operations remain headwinds. IBM could not be reached for comment outside regular business hours. Jefferies lowered their price target for IBM to $135 after the company missed revenue and earnings targets in the first quarter. More than 30,000 people are expected to attend the annual meeting, and participate in company-sponsored activities, though the main attraction is CEO Warren Buffett and Vice Chairman Charlie Munger's Q&A session on Saturday.
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Year-to-date, IBM has lost about 4.18% in value, and its last quarterly earnings report showed that the company's revenues have fallen for 20 straight quarters in a row.
Berkshire Hathaway shareholders from around the globe are converging on places like Warren Buffett's modest Dundee home to sample some of the source waters of a legend in the investment world. In December 2012, Buffett said he paid just over $1.2 billion to buy 9,200 A-shares. Buffett has been buying Apple for the a year ago, and it has enjoyed steady gains in stock price.
Buffett has always been willing to sell stock investments, as opposed to entire businesses, when they do not pan out or he finds something better.
The cheese-and-ketchup maker's first-quarter sales dip of 3 percent was the fourth such decline during the past five quarters. "But we have made no commitment that Berkshire will hold any of its marketable securities forever". Two analysts have rated the stock with a sell rating, two have given a hold rating and one has issued a buy rating to the stock.