Buffett Watch

PetroChina Selling Accelerates at Warren Buffett's Berkshire Hathaway - Stake Now 5.4%


Warren Buffett's Berkshire Hathaway has sold more shares from his controversial PetroChina holdings, bringing his stake to 5.4% of the stock not held by the Chinese government.

Berkshire held over 11% of the stock in July and almost 10% at the beginning of this month.

As you can see in the table below listing the total shares held at each filing, the selling is picking up speed, especially with the most recent filing. It shows an average selling rate of 80 million shares a day since the previous filing just four days earlier.  (Under Hong Kong Exchange rules, not every sale has to be disclosed, just those that take the stake across a whole percentage number.)

Berkshire has disposed of almost 1.2 billion shares since July.  At this rate, it looks like Buffett may be moving to liquidate the entire position.

What's driving the selling?  As we've been saying all along, that's a matter of speculation since Buffett rarely explains his actions as he's taking them.

One obvious answer: taking a huge profit, roughly 600 percent since he built the stake back in 2003.  PetroChina shares hit a record high last week.  Currently, in U.S. trading:

Another possibility, which isn't necessarily contradictory: pressure from human rights activists unhappy with China's business ties to Sudan.  Reuters quotes the director of China Oil and Gas Research of CLSA as saying, "He's being pressured by the human rights activists about PetroChina's parent's involvement in Sudan.  He may sell all by the end of the month."

Responding to the September 21 sale, the group Investors Against Genocidesays on its web site, "With each additional sale .. we get an increasingly clear demonstration that Berkshire Hathaway is on a path to divest its holdings."

Or perhaps, as Eric Berkowitz emailed to Warren Buffett Watch, it's the comfort factor (which is also not necessarily contradictory.)  "I think the bottom line is that Buffett and Charlie Munger are much more comfortable investing in terrific All-American companies with great brands and strong, long lasting fundamentals.  A major investment in an overseas company represents the same unknown factor that kept them out of the technology and internet boom and bust of the late 1990s."

Questions?  Comments?  Email me at buffettwatch@cnbc.com

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