IBM Underperforms Again, Loses Buffett Millions

Warren Buffett is having something of a rough week in the stock market. Less than a week after United Airline’s stocks took a tumble, IBM shares are suddenly not looking quite so good either. The Oracle of Omaha lost somewhere in the ballpark of $800 million on Wednesday after IBM’s first quarter results were posted showing less revenue than expected. In response, the stock dropped nearly $10 per share on Wednesday morning.

This most recent quarter loss makes the 20th straight quarter with revenue losses for the computing giant which seems to be struggling with pleasing its clients. Although IBM made a name for itself on hardware, the company has been attempting to break into the cloud computing market recently with mediocre results.

However, not all hope is completely lost for Buffet, who is currently the largest shareholder of IBM with 81.2 million shares. According to the same report, IBM paid out around $1.8 billion in dividends, making Buffett’s bet basically break even, all things considered.

There’s no word on whether or not Buffett intends to hang on to IBM, although he has spoken out in the past about how much he liked IBM. The decision to buy, he explained in 2011 to CNBC, was made after he toured IT departments in his subsidiary companies and gained a small understanding of the technological world that he so famously avoided in the 90s.

“What you pay for a stock doesn’t mean anything. What means something is where the company’s going to be in five to 10 years,” Buffett told CNBC last year. “I think IBM will be worth more money but, like I said, I could be wrong but we’ll accept that.”

As we’ve mentioned many times, Buffett is a value investor who is more interested in the long term. It’s possible that he still thinks IBM is as good a bet as he did years ago and it will be interesting to see if he hangs on to the stock or not.

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