Berkshire Hathaway may be sitting on a loss even as UnitedHealth shares push higher.
The healthcare giant’s stock has jumped nearly 30% since Warren Buffett’s firm disclosed in mid-August that it bought just over 5 million shares between April 1 and June 30.
According to CNBC, that SEC filing hit right after the stock closed at $271.49. As of Friday, UnitedHealth ended the session at $352.51.
While the stock had already started climbing after hitting $237.77 on August 1, analysts say Berkshire’s name gave it a major push. Still, with UnitedHealth only up 13% from its $311.97 close on June 30, there’s a real chance the firm is still in the red.
Warren could be underwater depending on price paid
Since the exact timing of the buys hasn’t been disclosed, only a price range can be estimated. If Berkshire paid near Q2’s peak of $606.36 per share, the 5 million shares would have cost $3.1 billion, putting the investment 42% underwater.
If the purchases were made near the low of $248.88, it would’ve been a $1.3 billion stake, now showing a 42% gain. Using the average close across the quarter, the estimated cost comes out to $1.9 billion. Based on Friday’s close, that stake is now worth around $1.8 billion, roughly 8% lower.
Because UnitedHealth collapsed earlier in the quarter, the assumption is that Berkshire bought in around those lower levels. Still, nothing’s confirmed until the next 13F filing drops in mid-November. The firm might’ve kept buying in Q3, but until that paperwork comes out, it’s all speculation.
The stock is still down about 30% year-to-date, but there’s some cautious optimism around a turnaround. Morgan Stanley’s Erin Wright lifted her price target to $395 from $325 after meeting with company management. “We are incrementally positive following discussions with UNH [management] where it had conviction in the turnaround,” she said.
On CNBC’s “Lightning Round,” Jim Cramer said he usually avoids stocks under investigation. But he added, “There are some people who seem to know that the worst is over,” suggesting confidence may be returning among large players.
Other holdings under pressure as Forbes ranking drops
While UnitedHealth is showing signs of recovery, Berkshire’s other plays are catching heat. Kraft Heinz dropped another 4.25% this week after falling more than 2% the previous week.
The company’s plan to split into two, reversing its 2015 merger, is moving forward, despite resistance from Warren, who helped engineer that deal.
In a rare public comment, Warren told CNBC he’s “disappointed” the company moved ahead with the split, knowing he opposed it. He currently represents Kraft Heinz’s largest shareholder.
That’s not just personal. Gordon Haskett’s Don Bilson told CNBC.com’s Yun Li, “Beyond any worries that investors might have with the plan itself, they must also grapple with the possibility that Warren will now dump his stock.”
Because Berkshire owns more than 10% of Kraft Heinz, any sale would need to be publicly reported within two business days. Meanwhile, Warren’s standing on the 2025 Forbes 400 list slipped from #5 to #9, despite his net worth holding steady at $150 billion.
Most of his wealth is tied to Berkshire’s A shares, which rose nearly 10% this year. But Warren gave away stock worth $6 billion this summer to the Gates Foundation and his family foundations. That’s on top of the $1.1 billion he gave them last Thanksgiving.
If he’d never given any shares away, Warren would now be worth about $350 billion, putting him second behind Elon Musk, whose wealth hit $428 billion.
Oracle’s strong earnings added $100 billion to Larry Ellison’s net worth the day after the cutoff, bringing him to $352 billion, as Cryptopolitan previously reported. Tesla stock has also climbed. That would place Warren and Ellison neck-and-neck, but Musk remains out front at $463 billion.
This week, Warren was in New York for the 30th anniversary celebration of CNBC’s “Squawk Box.” The show premiered in 1995. Jim Cramer posted a photo from the event, standing next to Warren and calling him his “lifelong idol.”
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