FIRE-nance News | Is Warren Buffett secretly buying Tesla stock worth millions? Here is the truth
Updated: Nov 29, 2020
Massive speculations are doing the round that leading investor and chairman of Berkshire Hathaway (BH), Warren Buffett is reportedly building a massive position in the American electric vehicle (EV) and clean energy company, Tesla’s surging stock.
Musk’s company shares registered a sharp spike of more than 10% and recently added 19% this week. Meanwhile, BH did not reveal details on its position in its 13F filing and added that it has been submitted separately with the US Securities and Exchange Commission (SEC).
According to finance professor David Kass from the University of Maryland, Buffett is certainly building a major position at present that he may disclose in the upcoming 13F. Kass has been tracking the movements of Buffett for over 30 years and went on to reveal that the investor enjoyed confidentiality treatment at various times in the past.
Kass claimed that earlier Buffett similarly confidentially established a position in manufacturing, energy, and logistics company Phillips 66 in the year 2015 and prior to that, in International Business Machines.
Additionally, Edward Jones analyst James Shanahan strongly feels that BH is establishing a huge position in a public company and they may continue to do it before making the big disclosure.
James Shanahan also divulged that the third-quarter profits of BH that value the company’s equity portfolio at $245 barring Kraft Heinz Co. However, the company’s 13F filing reveals $220 billion in holdings.
Frank Peelen said on his Twitter handle, “Yesterday, I pointed out in this quoted thread that, based on data I gathered from 13F filings, a large number of TSLA shares seem to have gone missing during Q3, to the tune of 100M shares.” Peelen speculated that approximately $11 billion of discrepancy in BH’s investment figures soon after accounting for the latest investment might be a confidential move in Tesla. BH may not be required disclose their holdings if Tesla’s market capitalization is more than $220 billion (5% or less ownership) although exemptions can be granted by SEC.
Musk has reportedly said that he is not the biggest fan of Buffett.
Reports suggest that the reason why BH refrained from disclosing the source of investment is to avoid price swings. The question that is yet to be answered is how friendly the new investor will be towards Musk.
Earlier, Buffett made a front against Tesla’s initiative to build direct sales without classic car dealers in the USA. Whoever has purchased these shares, has only benefited Tesla as its stock registered an upward movement. It may last for another few days and lead the shares to rise in the shorter run.
France’s Neoen SA is set again to ink another deal with Tesla. in a bid to install world’s biggest lithium-ion batteries in Australia. The 300-megawatt Victorian Big Battery is expected to be located in the Southeastern city of Geelong and use Tesla’s Megapack technology. It is expected to become operation by the 2021-22 summer season.
Back in May 2020, Buffett was asked by Yahoo Finance whether he would buy Tesla with the former giving a laconic “No”. Early 2020, Buffett said that Tesla was a “great company but not an ideal investment target”. In 2018, Buffett publicly advised Apple not buy Tesla when they were valued anyway between $20-$80 billion.
Buffett has a habit of missing out on “cheap” tech companies only to cave in later, buying them at a much higher price. This includes Apple, Google, Amazon, IBM and now potentially Tesla.
Earlier this year in April, Buffett once again endorsed BYD and this time with a mask. Buffett was wearing a BYD mask that said, “I want to live to be 100 and still look good". There was another message inside the photo that read, "My BYD mask is helping me achieve my goals."
Warren Buffett buying Tesla would be one of the biggest surprises of the year. To date, it remains unimaginable. Buffett has earlier remarked that he did not desire to invest in Tesla and preferred BYD that is economical as per valuation metrics.
Time will only unravel what has transpired between Buffett and Tesla.