The Wall Street investment maestro Warren Buffett has walked out of the 125-year-old American multinational conglomerate General Electric. Warren Buffett’s Berkshire Hathaway cashed out its entire stake worth $315 million in the second quarter, according to filings. General Electric has underperformed and returned less than 9% as compared to the benchmark S&P 500 which has advanced more than 35% over the since last three years.
Berkshire Hathaway owned about 10.6 million shares in the company. Soon after General Electric announced the exit of the long-time CEO Jeffrey Immelt, Warren Buffett dumped all the holdings remained which he extended in 2008. Berkshire Hathaway had acquired some stake back in 2008 during the financial crisis after lending around $3 billion to GE.
Warren Buffett has sold 10.6 million shares worth $315 million, according to Securities and Exchange Commission filings. According to the Wall Street Journal, Warren Buffett has made a net profit of about $1 Billion from his $3 billion investment. The Berkshire’s chief continues to be a shareholder of Synchrony Financial, a consumer financial services firm which split off from GE in 2015. Berkshire Hathaway has increased its holdings in General Motors and Apple Inc.
General Electric shares have lost 19.39% in over last one year and fell 0.87% on Tuesday to $25.14. The company’s stock price fell so far in 2017 while the broader market index S&P 500 have risen up by 9%.
Earlier in July 2017, General Electric’s long-serving CEO Jeffrey Immelt stepped down from the post but will continue to serve as the chairman till the end of the year. “We win in markets, not conference rooms,” said Jeffrey Immelt, among other things, to the firm’s employees on his last day in the office. Encouraging the company’s executives to be more watchful of the clients’ needs, Jeff Immelt wrote: “I truly believe that customers determine our success. Surround yourself with “scouts” who will negotiate for the future. You must listen to them.”
Jeff Immelt, 61, who had served as the Chairman and CEO of the manufacturing giant GE since 2001, handed over the chief executive role to another company veteran John Flannery. General Electric is a 125 years old American multinational conglomerate having business interests in financial services, medical devices, life sciences, pharmaceutical, automotive, software development and engineering industries.