Could Warren Buffett Be Yahoo’s White Knight?
Warren Buffett doesn’t have much love for tech companies — it’s an investment sector his sprawling $210 billion Berkshire Hathaway empire has generally avoided.
But the Oracle of Omaha could play a role in the future of Yahoo, which is scoping out potential buyers: Buffett last week confirmed he would provide financing for a bid by Dan Gilbert for the faltering internet company. Gilbert, the billionaire founder of Quicken Loans, also owns the Cleveland Cavaliers.
That same day, Berkshire Hathaway revealed that it owns 9.81 million shares of Apple, worth $1 billion as of March 31. The news pushed shares of the tech company up 3.7% on May 16.
However, none of this means Buffett has changed his tune on technology. Analysts point out that the Apple investment was led by one of Berkshire Hathaway’s portfolio managers — not by Buffett himself. And Buffett characterized his offer to back a Yahoo takeover as a vote of confidence in his buddy Gilbert.
“I’m an enormous admirer of Dan and what he has accomplished in Quicken Loans,” Buffett said in a statement to CNBC. (He could not be reached for comment for this story.) “Yahoo is not the type of thing I’d ever be an equity partner in. I don’t know the business and wouldn’t know how to evaluate it.”
There was no word on the size of Gilbert’s possible overture, or what his plans for Yahoo may be.
For now, Berkshire Hathaway — whose subsidiaries include Dairy Queen, Geico, Fruit of the Loom, and Benjamin Moore — remains largely on the high-tech sidelines. Its biggest bet in the space is its stake in IBM, which it increased earlier this year to 8.55%, worth about $12 billion. “We will not go into businesses where technology, which is way over my head, is crucial to the investment decision,” Buffett once declared, according to Alice Schroeder’s 2008 biography “The Snowball: Warren Buffett and the Business of Life.”
Berkshire Hathaway’s disclosure of its Apple stake in a regulatory filing came after notable investors Carl Icahn and David Tepper sold their shares in the tech giant, with Icahn citing concerns over the company’s uncertain prospects in China. Apple, for its part, is seeking to improve its foothold in China amid softer iPhone sales there, through its $1 billion investment in Didi Chuxing, a Beijing-based car-hailing service that is Uber’s biggest rival in the country.
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