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Berkshire Hathaway Buys Amazon Shares

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Berkshire Hathaway Buys Amazon Shares

Berkshire Hathaway Buys Amazon Shares

Warren Buffett of Berkshire Hathaway is well known for not being the biggest fan of technology stocks. Over the years, he has generally avoided these shares, saying that he does not understand the products or their markets well enough to be involved. His one exception being International Business Machines Corp. (IBM) in 2011, which resulted poorly and Buffett sold nearly all of his stock. However, Buffett jumped back into tech stocks in 2016 with the purchase of Apple stock. This trend seems to have continued in Berkshire, as they recently revealed their new stock purchases in Amazon.

In the past, Buffett has sung high praises of Amazon CEO Jeff Bezos. He admired his hard work and involvement within his company from afar, even though he never made a move to purchase shares.

“I was impressed by Jeff Bezos early,” Buffett said in 2017 to CNBC. “I never thought he’d pull off what he did, on the scale of what’s happened. It’s changed your behavior, everybody’s behaviors. The remarkable thing is he’s done it in two industries at the same time that really don’t have that much connection.” This was in reference to Amazon’s power within e-commerce as well as the could with Amazon Web Services. These services have seen an increase in revenue within the first few months of 2019, currently reaching 41%.

Buffett is quoted as saying “we missed it entirely” on Amazon for never having owned a share for years. However, it seems Berkshire Hathaway has learned its lesson. Buffet revealed on May 2, 2019 that Berkshire finally began purchasing Amazon shares. During his recent CNBC interview, Buffett said “one of the fellows in the office that manages money” bought some stock in Amazon. These “fellows” are in reference to two of Berkshire’s top investment managers, Todd Combs and Ted Weschler. Buffett has accredited them in the past to giving Berkshire a set of “younger eyes.”

As a result of this announcement, Amazon shares began rising in premarket trading. The shares rose at 2.1%, reaching $1,941. The stock has seen an increase of 26.6% so far within the new year. As of Thursday’s market close, Amazon’s value was $935 billion.

While Buffett revealed this new information, the exact amount that Berkshire Hathaway purchased in Amazon stocks is to be foreseen. He noted the amount will be disclosed in Berkshire’s quarterly report to the United States Securities and Exchange Commission later on this month.

If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation. We provide Amazon business accounting services to clients in New York and throughout the United States.

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