Warren Buffett vs. Hedge Funds – RE: Dow Chemical

We’ve just learned that Warren Buffett thinks it’s a bad idea to split Dow Chemical in two.

Buffett does not often get into an argument with anyone when it comes to the Berkshire Hathaway holdings. But a proposal put forth by Third Point hedge fund activist investor and CEO Dan Loeb, telling them to spin off the petrochemical manufacturing business at Dow Chemical did not go over too well with Warren Buffett.


During conversations with Andrew Liveris, Dow Chemical CEO, Buffett mentioned that he’s been very happy with the moves that the company has made thus far, and everything is in line with investors who “will stay versus investors who will leave,” as quoted by  the CEO.

Who is correct? Loeb makes some valid points in the letter that he wrote to Dow management. But does it really mean that the chemical company should split in half? You decide.