Warren Buffett took the market by surprise on Tuesday with the announcement that Berkshire Hathaway would take a $10 billion preferred share stake in Occidental Petroleum, contingent on its acquisition of Anadarko Petroleum succeeding.
But investors didn't need to be surprised — they could have made an educated guess the deal was coming since this past weekend, when a corporate jet tracker spotted an Occidental plane landing in Omaha.
Reports began surfacing in recent days that the Occidental Gulfstream plane was a sign Buffett might be preparing a bid in the hostile war between Chevron and Occidental over Anadarko, a Permian Basin driller seen as a key prize in an era of shale consolidation.
Analyst Don Bilson of independent research firm Gordon Haskett Research Advisors sent a note to his clients on Monday citing information from Quandl, which tracks corporate jet activity and other alternative sources of data important to the markets. Bloomberg cited information on Monday from FlightAirMap showing the Gulfstream jet was in Omaha on Sunday.
Haskett's Monday note, titled, "What was Occidental doing in Omaha?" came as Occidental was formalizing its counter-bid to Chevron's deal. It stated, "Here is where it gets a little more interesting. Warren Buffett does not show up as a holder of OXY or APC or CVX. And a quick search of OXY's 10-K for 'Nebraska' turns up nothing. Yet for some reason, an OXY jet was seen in Omaha yesterday. That strikes us as an odd trip for OXY to make, especially on a Sunday and while it is engaged in a high-stakes M&A battle. While we can't say what OXY might have been doing in Omaha yesterday, it has occurred to us that it might be trying to bring Buffett into this deal and help with the cash portion of its offer. We have assumed that OXY could go higher than $76 and if it really has paid Buffett a visit, we suspect it is gearing up to top CVX's inevitable bump. This mention comes with the standard caveat that Corporate Jet information can be noisy and difficult to read."
On Tuesday, Gordon Haskett analyst Bilson wrote to clients, "It pays to keep track of those tail numbers!"
Alternative sources of information have been used for years by hedge funds to stay ahead of the competition. Drones have flown over mall parking lots to track retail traffic, as well as operations at battleground stocks like Tesla to keep a tabs on production and deliveries.
Tracking corporate planes as an M&A indicator was popular in the 1990s, but companies began masking planes as a result. An FAA decision in 2011 to open up records on private plane flights led to renewed interest in the tactic. In 2017, hedge funds made winning bets using Johnson & Johnson corporate jet flight information before it acquired Actelion.