Multinational conglomerate company Berkshire Hathaway Inc owned by business tycoon Warren Buffett hit hard by the coronavirus pandemic.
Media reports said that the Berkshire Hathaway posted a record quarterly net loss of nearly $50 billion and said performance is suffering in several major operating businesses.
Berkshire said most of its more than 90 businesses are facing “relatively minor to severe” negative effects from COVID-19, the illness caused by the novel coronavirus and now punishing the global economy, with revenue slowing considerably in April even at businesses deemed “essential.”
The BNSF Railway company which is the largest railroad in North America said that the railroad saw shipping volumes of consumer products and coal fall.
Buffett also allowed Berkshire’s cash stake to rise to a record $137.3 billion from $128 billion at the end of 2019.
That reflected the billionaire’s inability to make large, “elephant” size acquisitions for his Omaha, Nebraska-based conglomerate, and caution in buying stocks.
Berkshire said it bought only a net $1.8 billion of stocks in the first quarter. It also said it repurchased $1.7 billion of its own stock, but that was less than in the prior quarter. “Historically, Buffett has been so visible in times of crisis, and encouraged investors to take advantage of market selloffs, but if he doesn’t see opportunities even in his own stock, what are we to think?” said Jim Shanahan, an analyst at Edward Jones & Co in St. Louis.
Buffett said Berkshire “made a mistake” investing approximately $7 billion to $8 billion in the sector, which was changed “in a very major way” as the pandemic shut down most air travel, through no fault of the airlines. Berkshire’s first-quarter net loss was $49.75 billion, or $30,653 per Class A share, reflecting $54.52 billion of losses on stock and other investments. Net earnings were $21.66 billion, or $13,209 per share, a year earlier.