Berkshire’s Buffett Buys $10.7 Billion IBM Stock

Chief Operating Officer of Berkshire Hathaway Inc. (NYSE:BRK.A), Warren Buffett has announced that he has acquired a 5.6 percent stake in International Business Machines Corp. (NYSE:IBM) for $10.7 billion.

The announcement by Buffett was made in an television interview on CNBC on Monday. The company also made the purchase official on Monday in the quarterly update filings of the company’s United States stock portfolio.

This is the first time that the legendary investor in investing in a technology company. Buffett is known to avoid technology companies in favor of traditional companies such as Coca-Cola and banks such as Bank of America.

According to Buffett he had to change his mind after looking at IBM’s annual reports.  He also expressed his regret over not realizing sooner the potential of investments in a company like IBM. He said that he had earlier not known that the business of IBM was to provide service and equipment to other companies.

According to Buffett, IBM has a sound plan for the future, which makes investment in the company, money well spent. He added that there “there’s a fair amount of presumption in many places that if you’re with IBM, you stay with them.”

According to the company’s filings with the Securities and Exchange Commission, Berkshire purchased about 64 million shares, or about 5.6 percent of IBM’s outstanding stock beginning in March. The shares of IBM increase in Monday’s premarket trading by $1.40, while earlier rising by as much as $3.5.

Buffett in the CNBC interview also said that his company was increasing its stake in Wells Fargo. The company already has a sizable investment in Wells Fargo and according to June’s filings, the company held around $352.3 million shares, up from 342.6 million shares in March.

Buffett’s investments are closely followed by other investors and analysts, because of the successful record of Buffett. According to Buffett, the company has been purchasing stocks aggressively in the current market turmoil, when the prices of the stocks were down.

The filings made on Monday at the Securities and Exchange Commission do not reveal the total number of shares owned by Berkshire in IBM. Berkshire has the custom of delaying the announcement of share purchases to buy time to build a position. According to Buffett the filings with the Securities and Exchange Commission are only the figures of the stocks purchased in the third quarter and the fourth quarter stock figures have not been revealed.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.