Through its investment arm Berkshire Hathaway Inc., billionaire Warren Buffett raised its stake in General Motors Co. by 60% to 40 million shares, controlling now 2.9% of outstanding GM stock.
The firm initially purchased 10 million shares in 2012, when the stock was trading in the low $20-per-share price. It closed Thursday at $34.55, down $1.02. At current prices, the stake is worth more than $1.38 billion. Buffett acquired the new shares in GM in the three months ending June 30. That’s the same period during which the U.S. Treasury has been steadily selling off its holdings in GM it received as part of its $49.5 billion bailout.
According to GM North America President Mark Reuss, the stock purchase is a healthy sign for the U.S. automaker and a positive boost for the company.
“We work really hard every day to do the right things and make the right cars that people want to buy. When someone does something like that it makes us all feel we’re on the right track…” he said. “Frankly, it’s been a tough four years coming out the financial crisis we were in and a little bit of validation here and there is OK. But we’ve got a lot of work to do, and we’ve got to keep our heads down here and keep it going.”
Berkshire Hathaway has major investments in auto insurance, life insurance, annuity sales and sales of jewelry. It holds large stakes in other major companies, including Coca-Cola Co.