Warren Buffett’s investment firm, Berkshire Hathaway, has bought more shares of Occidental Petroleum. This comes after the oil and gas producer saw a sharp 30% drop from its record high. Berkshire acquired 763,017 shares of the Houston-based company on Friday for $35.7 million.
According to a regulatory filing, Berkshire Hathaway is now Occidental’s largest investor, holding a 28.2% stake.
Shares of Occidental have fallen nearly 32% from an all-time high reached last April. The stock dropped more than 17% in 2024 as oil prices weakened. In late December, Berkshire bought more shares during a broad market pullback.
This showed their confidence in the company. Despite his significant stake, Buffett clarified that he wouldn’t take complete control of Occidental.
Berkshire boosts Occidental investment further
Legendary oilman Armand Hammer founded the company. There had been talk of a takeover after Berkshire was allowed to buy up to a 50% stake, but Buffett put those rumors to rest.
Buffett, known as the “Oracle of Omaha,” started buying Occidental shares after reading the company’s earnings call transcript. Occidental pays a 1.8% dividend yield and has also invested in a carbon capture business.
This aligns with broader trends towards sustainability in the energy sector. In addition to common shares, Berkshire owns $10 billion of Occidental preferred stock. It also warrants buying another 83.9 million common shares for $5 billion, or $59.62 each.
The warrants were obtained as part of a deal that helped finance Occidental’s acquisition endeavors. Buffett’s continued faith in Occidental has many watching to see if upcoming earnings prove him right.
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