Corona virus costs Warren Buffet’s Berkshire a massive $50 billion net loss as stock investments pummels
As the COVID-19 pandemic pummeled its stock investments, Warren Buffet’s Berkshire Hathaway on Saturday posted a net loss of approximately $50 billion though the operating profit rose.
The first-quarter net loss totaled $49.75 billion or $30,653 per Class A share, reflecting $54.52 billions of losses from investments. Last year, net earnings were $21.66 billion or $13,209 per share,
Buffet considers quarterly operating profit to be a better performance measure. It rose 6% to $5.87 billion.
Berkshire is required to report unrealized stock losses and gains with earnings according to an accounting rule. This leads to huge swings in the net results that Buffet considers meaningless.
For four years, Berkshire hasn’t been able to find a large company to buy outright. This has left about $137.3 billion of cash.
The Standard & Poor’s 500 slid 20% in the first quarter but there were steeper falls in American Express, Bank of America, Wells Fargo and four airlines- American, Delta, Southwest and United.
Berkshire’s operating businesses, like much of corporate America, was hurt by the pandemic, which hurt volumes at BSNF railroad and forced retail business to temporarily close stores.
Vice Chairman Charlie Munger told Wall Street Journal that a few small Berkshire business might also close.