In the transaction, STORE Capital issued some 18.6 million shares of company stock in a private placement to one of Berkshire Hathaway's subsidiaries, National Indemnity Company, at a price of $20.25 per share.
The Scottsdale, Ariz., based real estate firm announced Berkshire Hathaway's investment on Monday. So, most stocks that are involved with brick-and-mortar retail have fallen as well, and REITs that own retail real estate have not been spared.
"We're devoted to doing service-sector investments...where you can't buy these services through the internet", company CEO Christopher Volk said. The stock jumped to $23.30 at 7:59 a.m.in NY.
One possible reason is that Berkshire is betting that not all retail is in trouble - specifically service-based businesses that have little to worry about in terms of e-commerce headwinds.
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Argentine football player Lionel Messi attends an event of the Adidas sportswear manufacturer in Beijing, China June 2, 2017.
The CEO of Berkshire Hathaway said the USA could afford to provide all Americans with government healthcare as its "gobbling up well over $3 trillion a year". Berkshire "saw an opportunity to invest at an attractive price, and they believe in us".
The announcement sent shares of Store Capital higher by more than 10 percent on Monday.
Argus began new coverage on Berkshire Hathaway giving the company a " rating. Mr. Buffett responded within hours, he said, asking for more information. AMC Entertainment, Applebee's and Ashley Furniture are among its 10 biggest customers, according to an investor presentation. It is not clear who at the company is directly responsible for the Store Capital investment.
While the USA economy and stock markets have been growing since bottoming out in 2009, Buffett said it's the mega-rich who have been reaping the rewards, not the average worker. The investment makes it Store's third-largest investor, after Vanguard Group and Fidelity Management & Research.