Warren Buffet is one of the greatest entrepreneurs of all times, with 80 years old he still rules Berkshire Hathaway Inc. and continues to expand his billionaire empire, but what happened with his recent investment Lubrizol? Was it a good or bad deal?
Lubrizol is a company that creates chemicals that reduce environmental impact like engine oil additives, viscosity modifiers, coatings, engineered polymers just to mention some of them. Warren Buffet set his eyes in this company for being a leader company in most of his products so it wasn’t a surprise that Warren Buffet wanted to buy this company. In 2011 the Omaha Oracle decided to buy this company for almost half of his billionaire empire.
What happened with his heir David Sokol?
David Sokol used to be Warren Buffet right hand and former director of Buffet’s investment firm, apparently Sokol bought some of Lubrizol shares and he made bad excuses about why he did that, after not knowing how to explain his illegal activity he decided to resign leaving Buffet with no choice but to investigate and concluded that he violated the company’s policy.
Warren Buffet had a 365 million loss due to a disposition of an underperforming business, making Warren Buffet a clear example that everybody make mistakes once in a while, many of Lubrizol’s Oilfield solution units where shut down leaving hundreds of people unemployed.
At the end Lubrizol was both a good and bad deal, for one part they bought cheap shares for quality company that continue to expand and for the other side they had a huge loss that left people unemployed.