Warren Buffet's Berkshire Hathaway Loses $3 Billion in Airline Stocks
The billionaire investor's conglomerate counts Delta, Southwest, United, and American among its 25 biggest holdings, and owns more than 8% of all four companies.
Warren Buffett's Berkshire Hathaway suffered another blow this week after President Donald Trump announced restrictions on European travel to the US in response to the coronavirus threat, sending airline stocks into a tailspin.
The famed investor's conglomerate counts Delta Air Lines, Southwest Airlines, United Airlines, and American Airlines among its 25 biggest holdings, and the quartet made up about 4% of its portfolio at the end of December. Berkshire owned more than 8% of each of the four companies at the end of December, and together those shares were worth about $10 billion at that time, according to Gurufocus.
However, shares in American and United have more than halved in value since the start of this year, and Delta and Southwest stocks have tumbled by more than 25%, as coronavirus fears continue to weigh on travel demand.
As a result, the value of Berkshire's holdings has dropped by more than a third to about $6.3 billion. If the pandemic continues to plague airline stocks, that loss could grow.
Buffett won't be too worried. He recently argued that investors should celebrate the chance to buy quality stocks at a lower price. Berkshire also plowed another $45 million into Delta stock last month after it plunged 20% due to coronavirus.
The breakout of an oil-price war between Saudi Arabia, Russia, and other oil producers also promises to boost airlines' profits by slashing their fuel costs. Moreover, the Trump administration has promised to support airlines along with other industries suffering from the coronavirus outbreak.
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