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Warren Buffett

Investor Buffett buys big chunk of GM

on August 20 2013 | in Industry news, Latest news | by | with Comments Off

One of the world’s richest men has invested heavily in General Motors since the US Government began to sell off its stake in the carmaker.

Berkshire Hathaway chairman and Warren Buffett had 40 million shares in GM on June 30 – up 60 per cent from the stake Berkshire reported to the US Securities and Exchange Commission on March 31.

His stake is almost 3 per cent of GM stock. Buffett, 82, bought an initial 10 million shares last year when they were trading at US$20.

The US Treasury said late last year that it would begin getting out of GM on its way to zero investment in the company by 2014.

It took a 61 per cent majority stake (500 million shares) in bankrupt GM in 2009 in return for a US$49.5 billion taxpayer bailout.

The federal government now holds 136 million shares. It has just made a profit of US$877 million from the sale in June of about US$2 billion worth of GM shares.

Billionaire Buffett appears to be betting that the worst is behind GM. Analysts say he is following his long-standing advice of buying low and holding long when it comes to stocks.

Investor interest in GM has risen in recent months as the company’s US products continue to garner positive reviews from research groups like J.D. Power and Associates.

GM shares recently hit a 52-week high of US$37.71 after hitting a low of US$19 in mid 2012. Some analysts believe GM shares will go as high as US$45.

 

 

 

 

 

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