Apple and Buffett saw value, acted
SAN FRANCISCO (Reuters) – 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 $183 on Friday after trading in the mid-$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 additional $100 billion of buybacks in an effort to further winnow down its mountain of cash.
Apple bought more than $23b. of its own shares in the first three months of the year at an average price of $171.48, the company said last week. A Buffett representative on Friday confirmed Berkshire Hathaway increased its stake in Apple by 75 million shares, for which the company looks to have paid between $12b. and $13b., based on the stock’s trading range during the period.
Funds from the repatriation of Apple’s $252b. overseas cash hoard arrived at a 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% 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.
Apple shares fell even more than the broader market, tumbling more than 13% from their record-high close. But while the S&P 500 has remained in correction territory, Apple shares quickly recovered, and it seems the company and Berkshire were there to help.
Buffett, a billionaire bargain hunter, increased his company’s stake to 240.3 million shares worth $42.5b. during first quarter.
At its low in February, the stock was available for as little as $150, an 18% discount to its On more than a third of the trading days during the March quarter, Apple’s stock traded below its volume-weighted average price, or VWAP, for the prior 60 days.