Apple and Buffett act to buy shares
APPLE Inc was not the only one to leap on a chance to buy its stock at a fat discount last quarter as Warren Buffett stepped in to scoop up an additional 75 million shares for Berkshire Hathaway at the same time.
Between them — the two biggest players in the iPhone maker’s shares — they bought nearly one of every 10 Apple shares traded during the quarter, according to Thomson Reuters calculations.
But the discount window did not stay open long, with Apple’s stock back at a record high above US$183 on Friday after trading in the mid-US$150s for part of the first quarter.
The recovery in the share prices makes it less opportune for Apple’s corporate treasury to execute purchases as it proceeds with an extra US$100 billion of buybacks in an effort to further winnow down its mountain of cash.
Apple bought over US$23 billion of its own shares in the first three months of the year at an average price of US$171.48, the company said last week. A Buffett representative on Friday confirmed Berkshire Hathaway added its stake in Apple by 75 million shares, for which the company looks to have paid between US$12 billion and US$13 billion, based on the stock’s trading range during the period.
Funds from the repatriation of Apple’s US$252 billion overseas cash hoard arrived at an convenient time for traders working on behalf of Apple. The Cupertino, California, company’s massive share purchase in the March quarter coincided with a 10 percent slump in the S&P 500 between January 26 and February 8.
That drop raised fears across Wall Street that a nine-year bull market was ending and made it easier for big players amassing shares in a company to find willing sellers.