Buffett cuts stake in IBM, sending stock down

Warren Buffett says he’s sold about a third of the 81 million shares his company holds in IBM, sending the stock down sharply in early trading.

Buffett bought into IBM about six years ago, when its stock was approaching an all-time high. In March 2013, IBM’s stock rose to about US$212. It has declined since then.

Buffet said Friday, “I don’t value IBM the same way that I did six years ago when I started buying.”

According to Forbes.com, IBM faces tough competition from both large and small tech players–both Buffett and Moody’s have touched on this point, Forbes adds.

Two days ago, Moody’s downgraded IBM’s senior unsecured rating. However, the rating agency also “raised its outlook on IBM’s debt from negative to stable,” says Forbes.com, which notes IBM has argued it’s an investment-grade company.

At close on May 4, IBM’s common stock was sitting at US$159.05. As of 3:26pm ET on May 5, the stock had dropped to around US$154.87–about where the stock was sitting in early November 2016.

Berkshire Hathaway could still buy IBM shares, says Buffett, who noted the company kicks off its 2017 annual general meeting on May 6.

Also read:

Buffett criticizes high-fee managers in annual letter

What you don’t know about value investing