Having cut its stake to 652.9 million shares, down from 2.3 billion at the end of 2006, Berkshire Hathaway now owns less than 5 percent of PetroChina, and won’t be required to file additional updates on stock sales, leading analysts to believe that the rest of it could have been sold already. Some people want to know why. Money or genocide? (You know what we think).
Earlier: Why Doesn’t Warren Buffett Want To Fund Genocide Anymore?
Buffett’s PetroChina Sale [WSJ]
*We say yes. The message, which Buffett is rumored to have seen before it was cleaned up, read, “Will your conscience let you off on a technicality? The answer is ‘no,’ you stupid Sudanese-killing motherfucker.” That would affect even the most calloused among us.
Warren Buffett has once again reduced Berkshire Hathaway’s stake in PetroChina. Are you surprised? You shouldn’t be. This is the sixth time since July that Buffett has sold shares in the oil and gas producer, this time unloading 220.5 million worth about $362 million, at an average price of HK$12.80 each. BRK’s holdings in Petro are now down nearly half, to 5.44% from a summer high of 11.05%. The fact that PetroChina’s stock hit a record high last week has caused horribly naïve analysts to cite “money” as being a large factor, if not the only factor, in Buffett’s September 25 sale, though the true pink elephant in the room that no one will touch (not even Punk Ziegal & Co) is that sometime in July, Buffett started making a conscious effort to disassociate himself from genocide.
His choice to stop funding the population project in the Sudan—after rejecting a Berkshire shareholder’s proposal to sell the entire PetroChina stake because of the parent company’s ties to the Sudanese government in May—is just one in a series of truly bizarre decisions on Buffett’s part, including but not limited to (possibly) mulling a stake in a firm at which you can take a few days off to play cards in midst of an enormous crisis but the line is drawn (and fired) at two weeks, and not pressing charges following John Carney’s attempted burglary at Buffett’s Omaha house.
Earlier: Washing Our Hands Of The Situation
Why Doesn’t Warren Buffett Want To Fund Genocide Anymore?
You Say Harem, I Say Whorehouse
Buffett Sells PetroChina Shares for the Sixth Time [CNBC]
Most of you are too young to remember this, but back in 1974, when I was working at Salomon Brothers, stocks were really undervalued. How undervalued were they? So undervalued that my good friend Warren Buffett once told me they made him feel “like an oversexed guy in a whorehouse.” We were in his office at the time, which, by the way, looked (and still looks) like a Russ Meyer set, so the bounds of propriety didn’t stop us from having a good laugh about it. ‘Forbes’ actually heard about the analogy and wanted to use it in a profile they were writing about the old boy, which they did, but changed the last word to “harem.” But, for the record, it was originally “whorehouse.” So now you know.
James Michaels, Longtime Forbes Editor, Dies at 86 [New York Times]
Bear Stearns shares shot up over 8% yesterday after reports surfaced that the Wall Street bank in serious talks with Warren E. Buffett about selling the Oracle of Omaha as much as 20 percent of the firm. But is Warren really riding to the Bear’s rescue? We’re skeptical.
It’s hardly news that Bear Stearns has been out shopping a 20% stake to potential investors. There’s been talk of several US bidders and, of course, a Chinese take-out bank making bids. But does Warren make sense? That old guy made out decently with Salomon Brothers but he still hates on them. Yesterday Bess quoted him as saying he how much he found the “brash Salomon culture of big egos, big risks and even bigger salaries to be out of step with his down-to-earth demeanor.” Do you want to be the person who sells him the story that Bear is totally different? We’d rather tell him why Bess Levin was called DQ in high school than try to explain Bear’s internal culture to him.
More importantly, there’s little about Bear Stearns to suggest that Buffett would look to put in that kind of money. Trading below book value? You’re going to tell us anyone knows what Bear Stearns book value is? Even Bear Stearns admits its guessing about the value of some of the assets it owns. Reliable revenue stream? This company makes much of its money trading securities.
It’s also hard to see what Buffett brings to Bear Stearns apart from money and a reputational boost. Bear Stears needs a large cash infusion and a partner that can help it build global exposure. How does Buffett add value to the business? We don’t see it.
Probably the strongest point in favor of the rumor is that Buffett is unpredictable. And so that wascaly wabbit might have something this wacky up his sleeve. Just when you thought he was buying trains, he turns around and buys traders.
Yesterday, CNBC’s “simple country reporter” Charlie Gasparino sounded a skeptical note. Nothing we heard would cause us to think that the Old Man of Omaha is anywhere close to buying a huge chunk of Bear Stearns. We do a lot of rumor sorting here at DealBreaker, and we call bullshit on this rumor.
Warren Buffett’s petition for membership to the egalitarian brotherhood of People Who Are Fucking Nuts has been officially accepted. Last year, he decided that Berkshire Hathaway-owned Geico would not take part in the Caveman sitcom. Last week he reduced his company’s investment in genocide to an embarrassingly trivial 8.93 percent. Today comes the news that he’s in serious talks to buy a stake in Bear Stearns. Three times = a trend, this one being WB’s insanity.
The New York Times reports that Buffett first approached James Cayne about the purchase last month, when the bank’s stock was about to celebrate its one-year low of $100. Deals have faltered in the past because the bridge player (first, CEO second) has often insisted on premiums as high as 40 percent above share price from outside investors. This time, and no one can say for certain but it may have something to do with two failed hedge funds, a 61 percent decline in third quarter profits and the fact that BSC can no longer afford its much-needed cleaning staff, Cayne is reportedly holding out for a premium of only around 20 percent.
Bear’s shares jumped on the rumors of possible sale this afternoon, with the stock trading up over 8 percent. Punk Ziegel analyst Richard Bove upgraded BSC from “sell” to “market perform.” Spokesmen for both Bear and Buffett declined to comment, which generally means they’re up to something, though CNBC’s Charlie Gasparino said that he “doubts” the reports are true. (Gasparino also noted with what sounded like hurt feelings that “Jimmy Cayne has not returned my calls,” presumably because it’s a beautiful day for golf.)
In 1987 Buffett took a 12 percent stake in Salomon Brothers, a move he later regretted, finding the “brash Salomon culture of big egos, big risks and even bigger salaries to be out of step with his down-to-earth demeanor.” Hopefully he can be reminded of the bad taste SB left in his mouth, which not even a dozen Oreo Blizzards could purge, before it’s too late. Carney’s got the keys to his house– everyone meets there tonight at 8 for an intervention (power of attorney papers have already been drawn up). We lost him on the Sudan. Let’s not lose him on this.
Earlier: Why Doesn’t Warren Buffett Want To Fund Genocide Anymore?
Buffett Among Those Said to Consider Bear Stake [New York Times]
For reasons totally lost on us, Warren Buffett has once again scaled back Berkshire Hathaway’s stake in PetroChina. In July, Berk sold holdings in the company worth $27 million. Last week, it was $136 million. And just today, 28 million shares valued at $40 million, reducing BRK’s interest to a paltry 8.93 percent from over 11 percent this year.
For those of you who don’t know what this means, we’ll tell you what this means: slowly but surely, Warren Buffett is distancing himself from a government-run company that human rights activists claim has extensive involvement with the Sudan oil industry, and perpetuates what they call “the humanitarian crisis” in Darfur. (This is an overly dramatic way of spinning the truth, which is simply that the region is going through a restructuring of its population.)
Until fairly recently, Buffett had stood up to the anti-genocists, including BRK shareholder Judith Porter, who told WB that cutting ties with PTR would “send a signal to China and to the Sudan that there are costs for continuing this destruction.” Buffett argued that he and Berkshire had nothing to do with the “situation,” and that Judy and everyone else ought to quit their bitching. And when asked if today’s and last week’s and July’s sale had anything to do with a decision to take responsibility for aiding and abet serial killers, he said no. And analysts are in agreement: they think it’s just about “the money.”
But we know they’re lying. Nobody wants to admit it, but something’s going on with that old kook, and he’s going soft. Is it the new, young, probably liberal wife’s influence? A sudden fear that John Carney, against all odds, might’ve been onto something when he asked, “is Warren Buffett going to hell?” The fact that in May, two months before he started selling, we called him an “Equal Opportunity Genocide Supporter”? (That was a compliment!) A near-death, life-changing experience? An Oreo Blizzard epiphany?
Don’t answer that. ‘Cause we don’t want to know why this happening, we just want it fixed. Let things go back to the way they were, and no one gets hurt (except maybe the Sudanese. Whatever: details). If we isolate the problem now, we may be able to salvage this thing, but we have to act fast. Today he sells a percentage of his stake in PetroChina for allegedly purely monetary reasons. Tomorrow it could be standing up in a local Dairy Queen and saying “not on my watch.” I just pray it’s not too late.
Earlier: Warren Buffett Is An Equal Opportunity Genocide Supporter
Warren Buffett Trims PetroChina Stake for Third Time [CNBC]
In what the Omaha Police Department is calling an attempted “robbery,” a man with a fake gun and camouflage paint on his face tried to enter the home of Warren Buffett last evening, uninvited. Police responded to a radio call about a disturbance at Buffett’s home at around 10:13 p.m. Astrid, WB’s wife, contacted the authorities after the man in question rang the front doorbell and had a “confrontation” with the estate’s security guard. Unfortunately, Nebraska police, never having dealt with a burglary, were a little late arriving to the scene, and missed the man by a good five minutes.
Anyone with any information is asked to call Crime Stoppers at 402-444-STOP, or the Major Crimes Unit at 402-444-5657. Suspects include a jealous neighbor and the rocket scientists at Global Alpha, who lost a sizeable amount of money by, among other things, betting against Berkshire (and whose leader, Mark Carhart, tempted the gods by making fun of Buffett publicly). And John Carney, who was found earlier this week mowing the lawn and cleaning the gutters at Chez Buffett, the yardwork being unsolicited by the Buffetts themselves.
Warren Buffett’s Wife Reports Robbery Attempt [KETV]