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FRI, FEB 02, 2024

WARREN BUFFETT WATCH

Fresh record highs as Berkshire's A shares close in on $600,000
Both classes of Berkshire Hathaway shares closed today at fresh record highs, but the pace of the gains slowed from last week.

The A shares closed today at $589,498 per share and hit a record intraday high of $590,000 during the day's trading.

For the week, they're up 1.2%, compared to last week's 4.6% advance.

The stock is up 8.1% since its near-term closing low of $545,250 on January 17.

The more widely held B shares also ended the day with a record high of $390.75 per share and set a new intraday high of $392.07.

Like the A shares, however, this week's increase of 1.4% is well below last week's 5.0% rally.

They are up 8.8% from their near-term closing low of $359.29, also on January 17.

 

Berkshire puts some more pocket change into SiriusXM arbitrage
This week, Berkshire added another $55 million, a very small amount by the company's standards, to what appears to be an ongoing bet that its SiriusXM tracking stocks (LSXMA and LSXMK) will generate what could be a 41% windfall later this year when Liberty exchanges them for shares (SIRI) in the satellite radio company itself.

(See last week's newsletter for details on the arbitrage potential.)

Disclosures show that on Tuesday, Wednesday, and Thursday, it bought almost 800,000 shares of LSXMA for $24.3 million (average price: $30.37) and 1.0 million shares of LSXMK for $31.2 million (average price: $30.30).

It's beginning, however, to add up.

Since the beginning of the year, Berkshire has spent a total of $267.2 million over 12 days of purchases.

The market value of the combination of Berkshire's previous holdings and this year's additions is a respectable $2.2 billion, although that is less than 1% of Berkshire's equity portfolio.

While Berkshire stands to realize a gain of almost one billion dollars based on the current $5.17 price of SIRI shares, there are concerns the stock is overvalued.

CNBC Pro notes that Wells Fargo analyst Steven Cahall has downgraded SIRI to underweight from equal weight. He estimates its post-deal fair value will be $4.50.

And Barron's says this week's proxy for the merger "highlights the high value of the satellite radio company relative to the cable industry" with projections of lower revenue and earnings this year,
 

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