Buffett's 400 Million Apple Shares... A 'Permanent Stake' Like Coca-Cola?

Apple and Coca-Cola Each Held 400 Million Shares in Q2
Buffett's Coca-Cola Stake Unchanged for 30 Years

‘The Sage of Omaha’ Warren Buffett recently revealed that the Apple shares he sold nearly half of and the shares he retained both amount to 400 million, the same as his Coca-Cola holdings. In the market, there is analysis suggesting this might be a signal that Buffett intends to stop selling Apple shares and hold onto his current stake just like he does with Coca-Cola.

According to the 13-F filing submitted by Berkshire Hathaway (Berkshire), led by Buffett, to the U.S. Securities and Exchange Commission (SEC) on the 14th (local time), as of the second quarter, Berkshire holds a total of 400 million Apple shares, which is equal to its Coca-Cola shareholding.

[Image source=AP Yonhap News]

CNBC evaluated this by saying, “Buffett has provided a clue to investors who were weighing whether to sell more Apple shares.” Earlier, Berkshire announced in its Q2 earnings report on the 3rd that it had reduced its Apple stake from $174.3 billion (approximately 237 trillion KRW) at the end of last year to $84.2 billion (approximately 115 trillion KRW), cutting it by nearly half. This sale pushed Berkshire’s cash holdings to an all-time high. At that time, concerns arose in the market that Buffett might be anticipating a recession, and attention focused on whether he would sell more Apple shares.

Some Berkshire experts are placing significance on the fact that Berkshire’s Apple holdings are exactly 400 million shares. Not only is it a perfectly rounded number, but it is also the same stake as Coca-Cola, a stock symbolic of Buffett and the one he has held the longest. Buffett first purchased Coca-Cola shares in 1988 and steadily increased his stake to 100 million shares by 1994. After two 2-for-1 stock splits in 2006 and 2012, the number grew to 400 million shares. This means he has maintained his Coca-Cola stake for 30 years without additional buying or selling.

David Kass, a finance professor at the Robert H. Smith School of Business at the University of Maryland, noted, “If Buffett likes rounded numbers, he may have no plans to sell more Apple shares,” adding, “Just as Coca-Cola is Buffett’s ‘permanent stake,’ Apple could become the same.” Earlier, at Berkshire’s annual shareholders meeting in May, Buffett stated, “We own a wonderful business called Coca-Cola, and we also own Apple, which is even better,” and “barring anything special, we will hold onto Apple, Coca-Cola, and American Express.”

There was also a counterargument. Bill Stone, Chief Investment Officer (CIO) of Glenview Trust, dismissed the idea, saying, “Buffett doesn’t think that way,” and that the matching number of Coca-Cola and Apple shares is just a coincidence.

Meanwhile, on the New York Stock Exchange that day, Berkshire’s stock closed at $440.84, up 0.54% from the previous session. Apple’s stock closed at $224.72, up 1.35%.