Berkshire Hathaway exits Teva at a loss

Warren Buffett is giving up his holding in Teva Pharmaceuticals after four years, and has exited his investment in the company at a loss. The quarterly report of holding company Berkshire Hathaway, which Buffett controls, indicates that at the end of 2021 the company did not hold any shares in Teva, which means that in the course of the fourth quarter of last year it sold all of the 42.8 million shares it previously held,

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Berkshire Hathaway does not disclose at what prices it sold the shares, but Teva’s share price ranged between $7.9 and $10.2 during the fourth quarter, averaging $9.04. The shares were thus sold for between $338 million and $436 million. This would have resulted in a loss of about $365 million, as the estimated amount of Berkshire Hathaway’s investments in Teva, carried out over three quarters in 2017-2018, was some $750 million, with Teva’s share price over the period ranging from $11.5 to $25.

Berkshire Hathaway became a shareholder in Teva when Kare Schultz was appointed CEO of the company and presented his extensive streamlining plan. When it was first reported that Berkshire Hathaway had invested, Teva’s stock price rose sharply, but Buffett doused the enthusiasm when he revealed in an interview with CNBC that the decision to make the investment had not been his, but was made by one of his deputies, who would also decide when to sell the shares.

In late trading on Wall Street yesterday, following the filing by Berkshire Hathaway, Teva’s share price dipped 3%. On the Tel Aviv Stock Exchange this morning, the share price is down by just over 2%.

Published by Globes, Israel business news – en.globes.co.il – on February 15, 2022.

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