It’s been a rough few months for Buffett stocks with the recent United Airlines fiasco and, before that, the Wells Fargo scandal. Although the United Airlines fiasco is still playing out, the Wells Fargo scandal has pretty much died down and the company is in the process of making amends and rebuilding the company.
While many people jumped ship during both issues, Warren Buffett held tight to his stocks and weathered the storm. Ever the value investor, Buffett runs his investments for the long term and frequently says that he prefers to wait out the market panics, as long as the value is still present. However, now that the buzz has died down, it looks like Berkshire has begun selling back some of its Wells Fargo shares.
Berkshire told reporters that the sale had nothing to do with its confidence in the company, but rather in order to avoid federal regulations that would cause the company to have to pa hefty fees and adhere to strict regulations.
“These sales are not being made because of investment or valuation considerations,” Berkshire said in a statement.
According to CNBC, Wells Fargo has been repurchasing its stock in light of the recent scandal. The massive amount of repurchases meant that Berkshire’s shares rose above the 10% mark which, according to federal regulations, would make Berkshire a bank holding company. That status would drastically change the regulations that Berkshire has to comply with.
To avoid dealing with all of the new regulations and problems, Berkshire sold around 7.1 million shares and has announced that it will be selling 1.9 million more in order to keep its stake in the company below 10% of the remaining shares.