Warren Buffett’s Apple stake plunges in value by $19 billion in 2 days as tech rout continues

Summary List PlacementWarren Buffett

  • Warren Buffett’s Berkshire Hathaway saw the value of its Apple stock tumble as much as $19 billion in two days as the tech sell-off continued.
  • Apple’s stock price dropped 8% on Thursday and as much as 7% on Friday, slashing the value of Berkshire’s roughly 981 million shares in the tech titan to below $110 billion.
  • Berkshire has still more than tripled the value of its Apple investment, as it spent about $35 billion to build the 5.7% stake.
  • Its Apple stake is still worth more than the market capitalization of Citigroup or Starbucks.
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Warren Buffett’s Berkshire Hathaway saw more than $19 billion wiped off the value of its Apple stock during the tech rout on Thursday and Friday.

The famed investor’s conglomerate owns close to 981 million Apple shares following the recent four-for-one stock split, giving it a 5.7% stake in the iPhone maker.

Apple’s stock price tumbled 8% on Thursday and as much as 7% on Friday. The decline cut the value of Berkshire’s stake to less than $110 billion at one point — $26 billion below its $135 billion peak on Wednesday, when Apple shares hit a record high.

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However, Apple stock is still up more than 50% this year. Its outperformance reflects unprecedented efforts by the US government and Federal Reserve to keep markets afloat, the boom in day traders with an insatiable appetite for tech stocks, and robust demand for Apple’s products and services as consumers seek to stay informed, entertained, and productive during the pandemic.

Berkshire remains heavily in the green on Apple, the biggest holding in its stock portfolio. It spent about $35 billion to build the position between 2016 and 2018, meaning it has still more than tripled the value of its investment. However, its current $74 billion gain is well below the $100 billion level it briefly hit on Wednesday.

Still, Berkshire’s $109 billion in Apple stock is worth roughly as much as the entire market capitalization of IBM and more than Citigroup ($108 billion) or Starbucks ($101 billion). It’s also more valuable than Buffett’s personal fortune of about $83 billion, according to the Bloomberg Billionaires Index.

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Moreover, Berkshire’s Apple stake represents more than 20% of Berkshire’s $516 billion market capitalization. That’s striking because Berkshire owns scores of companies including Geico and See’s Candies, it boasted $390 billion in net assets at the last count, and Apple is just one of the more than 40 holdings in its equity portfolio.

Here’s Apple’s stock chart for the year so far:

Apple chart Sep 2020Markets Insider

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