Berkshire Hathaway has recently sold 5.5 million shares of HP Inc., marking its first stock sale in the personal computer and printer manufacturer since acquiring a 12% stake earlier this year. The transaction took place from Monday through Wednesday of this week, leaving Berkshire Hathaway with a remaining holding of 115.5 million HP shares, as confirmed by a form 4 filing with the Securities and Exchange Commission.
With the closing price of HP Inc. on Wednesday, Berkshire’s stake in the company is now valued at approximately $3.3 billion. Unfortunately, HP stock experienced a decline of 2.1%, reaching $28.33 on Wednesday. The sale of the 5.5 million shares was conducted at an average price of about $29, resulting in a total value of approximately $160 million.
Warren Buffett, CEO of Berkshire Hathaway, typically prefers to buy and sell shares within the company’s equity portfolio quietly. However, due to Berkshire holding over 10% of HP’s stock, the sell-off had to be disclosed within two business days. Currently, Berkshire Hathaway holds approximately 11.7% of HP Inc., according to industry estimates.
Investor Interest in Berkshire’s HP Stake
Investors are closely watching to see if Berkshire Hathaway continues to sell down its stake in HP. In recent quarters, Berkshire has been reducing its holdings in several bank stocks, including U.S. Bancorp (USB). The potential for more sales is causing concern among investors, which could put pressure on HP stock on Thursday.
Analyst Amit Daryanani from Evercore ISI noted that the share sale follows a challenging quarter for HP. The company lowered its FY23 EPS and FCF expectations due to macro softness and continued channel inventory overhang. Daryanani wonders whether Berkshire will continue reducing its ownership in the coming days and weeks or potentially wait until the upcoming analyst day to make any additional changes. It is estimated that Berkshire’s average cost for HP shares is around $36, indicating that the company may have incurred a loss on the sale. Berkshire’s last purchases of HP were made in April 2022.
Berkshire Hathaway has become increasingly active in buying and selling stocks in its equity portfolio in recent years.
In premarket trading on Thursday, HP stock has fallen by 2.4% to $27.65.
