Rich and famous Apple investor sells half of his stake in the company
Legendary investor Warren Buffet never invested in any technology stocks until he bought 10 million shares of Apple in 2016. By the end of last year, Buffett's Berkshire Hathaway holding company owned 905 million shares in Apple that was valued at $173.8 billion. Buffett reduced his stake in Apple earlier this year to 789 million shares. Now, Buffet has cut his position in Apple by half to 400 million shares worth about $88 billion. The long-term investor now owns 2.3% of the tech giant.
The "Oracle of Omaha" isn't one to use charts, day trade, or gamble in the options market. He looks for stocks with strong earnings growth that are undervalued. For such a conservative investor, especially one who stayed away from tech, what was it that caught his eye about Apple? It was the iPhone. Buffet explained a few years ago that while it was Steve Jobs who invented the device, he credits Tim Cook for managing that product and turning the company into one of the most valuable public firms in the world.
"I think that Tim Cook is one of the classiest CEOs. He understands the business and he has a product, which Steve Jobs basically invented, but Tim Cook has managed that company in an extraordinary way. It's a wonderful business so we own a lot of it."-Warren Buffett, legendary investor
It was just last year when Buffett said that if an iPhone user were offered $10,000 for his phone but had to promise to never use an iPhone again, he wouldn't take the deal. On the other hand, he said that if a Ford automobile owner were offered $10,000 not to buy another Ford, he would gladly take the money and purchase a Chevy. What Buffett is saying is that the iPhone has a loyal fan base that loves the product and would not want to switch to an Android phone. That brand loyalty helped him decide to invest in Apple.
Apple went public on December 12, 1980. | Image credit-NASDAQ
During the most recent Apple stockholder meeting in May, Apple CEO Tim Cook said of Buffett and Berkshire Hathaway, "It’s a privilege to have them as a shareholder." Speaking of stockholders, can you name the person who is the largest individual Apple stockholder? Hint: It's not Eva Jobs, Steve Wozniak, or Tim Cook. With 4.43 million shares valued at $973 million, it is Arthur Levinson who is Apple's Chairman of the Board.
"If you’re an Apple user and somebody offers you $10,000, but the only proviso is they’ll take away your iPhone and you’ll never be able to buy another, you’re not going to take it. If they tell you if you buy another Ford car, they’ll give you $10,000 not to do that, you’ll take the $10,000 and you’ll buy a Chevy instead."-Warren Buffett, legendary investor
Because Apple plays a large role in several stock indices including the S&P 500 and the Dow Jones Industrial Average, the company's largest institutional holders are index funds that must buy enough shares to mirror Apple's weight in the index each fund follows. Mutual funds company Vanguard owns 1.17 billion shares of Apple or 7.63% of the company. Vanguard Index Funds own an additional 981.4 million Apple shares or 6.4% of the tech giant.
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