Berkshire Hathaway Deploys Cash Under New CEO Greg Abel
The Story
Berkshire Hathaway reduced its cash reserves to $365.5 billion in the second quarter, as CEO Greg Abel directed capital toward stock buybacks and equity investments.
The company repurchased $4.5 billion of its own shares and invested nearly $20 billion in equities, including stakes in Alphabet and Taylor Morrison. This marks a shift in capital deployment under Abel, who took over as CEO from Warren Buffett. Operating earnings for the quarter rose 16% to nearly $13 billion, a performance that offset a decline in insurance underwriting profits.
Strength across Berkshire's energy, railroad, and manufacturing businesses contributed to the overall earnings increase. The company's previous strategy under Buffett had involved accumulating a cash pile over several years. Abel's recent actions signal a move to deploy this capital, ending a more than three-year selling streak for net stock investments. The deployment of capital through buybacks and new stock purchases represents a change in the company's financial strategy.
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