Berkshire Hathaway Repurchases 10% of Shares

Berkshire Hathaway has significantly reduced its share count through a robust buyback program, with nearly $75 billion spent on repurchasing common stock over the past five and a half years. This initiative has led to the elimination of over 10% of the company's total shares outstanding, according to Morningstar analyst Greggory Warren. Warren Buffett, the 93-year-old CEO, views these buybacks as a means to reward long-term shareholders, allowing them to increase their ownership percentage without additional investment. Buffett has established two key conditions for initiating buybacks: the stock must be undervalued, and the company must retain sufficient cash reserves post-repurchase. He has emphasized the importance of not overpaying for shares, stating that doing so would be "value-destroying" for shareholders. This cautious approach reflects Buffett's long-standing philosophy that both share repurchases and new share issuances should be conducted at rationally calculated intrinsic values to protect shareholder interests. In the first quarter of 2024, Berkshire Hathaway spent $2.6 billion on buybacks, an increase from $2.2 billion in the previous quarter. Buffett expressed confidence in the current pace of buybacks but indicated a willingness to increase spending if market conditions are favorable. He noted that the company remains poised to capitalize on attractive opportunities, reinforcing its commitment to shareholder value. Berkshire Hathaway's shares have seen a remarkable rise of over 20% this year, recently reaching a record closing high, reflecting investor confidence in Buffett's strategic decisions and the company's financial health.