Ajit Jain at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.
Gerald Miller | CNBC
Warren Buffett’s insurance chief and CEO Ajit Jain sells more than half his stake Berkshire HathawayA new regulatory filing shows.
The 73-year-old insurance vice chairman sold 200 shares of Berkshire Class A stock on Monday at an average price of $695,418 per share, for about $139 million. That leaves him with just 61 shares, while the family trust he and his spouse established for the benefit of future generations holds 55 shares and his nonprofit Jain Foundation holds 50 shares. The shares sold Monday represent 55% of his total stake in Berkshire Hathaway.
The move marked the biggest drop in Jain’s stake since he joined Berkshire Hathaway in 1986. The group’s share price exceeded US$700,000 $1 trillion market capitalization Late August.
“This seems to be a signal that Ajit believes Berkshire Hathaway is fully valued,” said David Kass, professor of finance at the University of Maryland’s Robert H. Smith School of Business. reflect.”
Berkshire Hathaway
This is also consistent with Berkshire’s recent sharp slowdown in share repurchase activity. Omaha, Neb.-based Berkshire Hathaway buyback Only $345 million The value of its own stock repurchased in the second quarter was significantly lower than the $2 billion repurchased in each of the previous two quarters.
“I think at best it just shows that the stock is not cheap,” said Bill Stone, chief information officer of Glenview Trust Co. and a Berkshire shareholder. “The book value is more than 1.6x, probably close to Buffett’s conservative estimate of intrinsic value. I don’t expect Berkshire to buy back much stock at this level.”
The India-born Jain played a crucial role in Berkshire’s unparalleled success. He has driven growth in the reinsurance industry and most recently led the turnaround of Geico, Berkshire’s crown car insurance business. In 2018, Jain was named vice chairman of insurance operations and appointed to Berkshire’s board of directors.
“Ajit has created tens of billions of dollars in value for Berkshire shareholders,” Buffett wrote in the 2017 annual letter.
Before it was officially announced that Greg Abel, Berkshire’s vice chairman of non-insurance operations, would eventually succeed the 94-year-old Buffett, there were rumors that Jain would one day lead the group. Buffett recently clarified that Jain “never wanted to run Berkshire” and that there was no competition between the two.
