Wikimedia CommonsWarren Buffett has announced that Berkshire Hathaway has completely divested its stake in Paramount Global, leading to substantial financial losses. This decision, which Buffett takes full responsibility for, was disclosed during the annual shareholders’ meeting in Omaha. Initially, Berkshire had purchased 63.3 million Class B non-voting shares in Paramount in early 2022, which represented about 10.1% of the company at the time.
Paramount
The sale comes after a series of challenges for Paramount, including declining revenues, a tough advertising market, and losses in their streaming ventures, which significantly affected the stock’s performance. Over the past two years, Paramount’s shares plummeted by 44% in 2022 and an additional 12% in 2023. Buffett cited these ongoing challenges and a saturated streaming market as key factors in his decision to sell.
The timing of the sale coincides with potential acquisition interest in Paramount from major players like Sony Pictures and Apollo Global Management, which have proposed a takeover worth approximately $26 billion. Despite the potential for recovery through these deals, Buffett’s decision to exit at a loss reflects his broader strategy and the acceptance of the volatile nature of entertainment and media investments.
Buffett’s candid admission highlights the risks inherent in large-scale media investments and provides a rare glimpse into the decision-making process of one of the world’s most renowned investors. Despite this setback, Berkshire Hathaway continues to manage a diverse portfolio with significant holdings across various sectors.
