October 2, 2022

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Buffett can buy half of the stock market winners

Buffett can buy half of the stock market winners

Shares in Occidental Petroleum rose about 10 percent on Friday after it became known that Berkshire Hathaway submitted an application to federal authorities in July to buy more of the oil company’s common stock. According to CNBC, the investment firm claims that a maximum stake of 50 percent will not hurt competition or reduce the authority of the authorities.

Carlos Clay, the acting director of electric power regulation who gave the approval on Friday, says the mandate was in the public interest.

Berkshire has been stockpiling shares in the Texas-based oil company this year, and it now has a 20.2 percent stake. That amounts to more than $13 billion in equity.

In addition, the investment firm has options to purchase another 83.9 million shares for $5 billion, which equates to $59.62 per share. stock. At the end of the stock exchange on Friday, the share price was $71.29, after the share price rose 130 percent so far this year.

If Berkshire exercised all the options, it would sit on an ownership stake close to 27%, CNBC wrote.

Possible acquisition

After approval by the authorities, many analysts are now speculating whether Buffett will buy the entire company.

I think Buffett will probably buy everything in the end. David Cass, professor of finance at the University of Maryland’s Robert H. Smith School of Business, said the 50 percent limit may have been set for receiving regulatory approval for a non-controlling interest.

– It is clear that he plans to buy more shares. So far, the maximum purchase price has been $60.37 per share. Share, says the finance professor.

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The latest to think that the “Oracle of Omaha” will continue to buy oil shares is Berkshire shareholder and head of Smead Capital Management, Cole Smead.

He will probably keep buying as much as he can for as little as $70 or $75. If you own 30 or 40 percent and want to buy the company for $95 or $100 per share, there’s a lot of money to save, Smead tells CNBC.

– This stake is traded like a casino. He further says that the market gives him all the shares he wants.