Warren Buffett’s Berkshire Hathaway bought 10 million shares of GM stock.
Mr. Buffett, who is chairman and CEO of Securities Exchange Commission by the Berkshire, has investment in many other companies. For the 10 million shares he paid $256.6 million. Buffet is well-known for making big bets on companies he considers undervalued.
“It confirms the investment thesis that we’ve had on GM,” Morningstar analyst Richard Hilgert said. “We definitely see some value there, just as Mr. Buffett does, and hopefully this will draw a little more attention to the stock from investors.”
Today, May 16th, GM’s stock fell less than 1% to close at $21.42. During GM’s initial public offering in November 2010, its shares were priced at $33. In 2011 GM released 60 new models in China selling an average one vehicle every 12 seconds. The company’s 11 joint venture in China translated in $3.2 billion in profit and $30 billion in revenue, from which GM received about $1.5 billion.
“Warren Buffet is a long-term investor that seeks out companies selling below their intrinsic value,” said David Kudla, CEO and chief investment strategist of Grand Blanc-based Mainstay Capital Management in a statement. “I think he is spot on with his purchase of GM shares.”