Author Topic: Buffett/Berkshire - general news  (Read 509291 times)

Libs

  • Full Member
  • ***
  • Posts: 231
Re: Buffett/Berkshire - general news
« Reply #320 on: September 02, 2016, 06:47:08 AM »
Is Berkshire shorting Dow Chemical?


Dow Chemical’s Stock Action Works in Warren Buffett’s Favor
By ANUPREETA DAS
Sept. 1, 2016 10:11 p.m. ET
0 COMMENTS
Dow Chemical Co.’s shares are showing clear signs of tinkering, according to an analysis by a Yale University professor.

The shares come within cents of an important threshold—$53.72—pretty often, but they have closed above that level so rarely that there’s less than a one-in-a-thousand chance that​it’s happening randomly, according to the analysis.

If the stock closes above $53.72 enough times, Dow has the option to buy back $3 billion worth of preferred shares from Warren Buffett’s Berkshire Hathaway. The Wall Street Journal reported last week that people familiar with the matter say that executives at Dow believe someone is selling its stock short—or betting that its price will fall—to keep it from rising above $53.72.

In his analysis, Yair Listokin, who teaches contracts at Yale Law School and is a trained economist, picked 48-cent ranges for the daily closing price of Dow stock from April 1, 2014 to Monday. He plotted every 48-cent increment of the share price during this period against the number of times the shares have closed in that range.

For instance, the shares have closed just below $53.72 more than 50 times. They have closed in the​$52.71 to $53.71 window 91 times. The number of times they have closed​in the window just above $53.72? Seven times.​

This week, the shares closed at $54.13 on Monday and $53.99 on Tuesday after the Journal story was published.

Mr. Listokin’s histogram shows the dramatic drop-off. Even accounting for different methods, Mr. Listokin said the chance of this being a random occurrence is remote.

“The probability that this would happen by chance is essentially zero,” he said, noting that his findings offer “pretty clear evidence of manipulation.”


​Mr. Listokin said he’s working on a more detailed paper and plans to make the Dow action part of his class discussion.​

Who would benefit from Dow’s share price being below $53.72? Berkshire comes to mind, since it gets a $255 million annual dividend from Dow for helping finance its 2009 takeover of Rohm & Haas. Kuwait’s sovereign-wealth fund also helped fund the deal and owns $1 billion of Dow preferred securities.

When asked, Mr. Buffett declined to comment last week on whether he or his deputies at Berkshire were shorting Dow to exert downward pressure on the stock price. Under the original agreement, Berkshire was forbidden from engaging in short selling or hedging its preferred stake in Dow until April 2014. The clause ensured that Berkshire was locked into its investment in Dow and couldn’t reduce “the economic consequence” of ownership through a hedge.




http://www.wsj.com/articles/dow-chemicals-stock-action-works-in-warren-buffetts-favor-1472782317
My username is not a political statement.....and I'm too lazy to change it.


fareastwarriors

  • Hero Member
  • *****
  • Posts: 3543
Re: Buffett/Berkshire - general news
« Reply #321 on: September 02, 2016, 07:17:47 AM »
Is Berkshire shorting Dow Chemical?


Dow Chemical’s Stock Action Works in Warren Buffett’s Favor
By ANUPREETA DAS
Sept. 1, 2016 10:11 p.m. ET
0 COMMENTS
Dow Chemical Co.’s shares are showing clear signs of tinkering, according to an analysis by a Yale University professor.

The shares come within cents of an important threshold—$53.72—pretty often, but they have closed above that level so rarely that there’s less than a one-in-a-thousand chance that​it’s happening randomly, according to the analysis.

If the stock closes above $53.72 enough times, Dow has the option to buy back $3 billion worth of preferred shares from Warren Buffett’s Berkshire Hathaway. The Wall Street Journal reported last week that people familiar with the matter say that executives at Dow believe someone is selling its stock short—or betting that its price will fall—to keep it from rising above $53.72.

In his analysis, Yair Listokin, who teaches contracts at Yale Law School and is a trained economist, picked 48-cent ranges for the daily closing price of Dow stock from April 1, 2014 to Monday. He plotted every 48-cent increment of the share price during this period against the number of times the shares have closed in that range.

For instance, the shares have closed just below $53.72 more than 50 times. They have closed in the​$52.71 to $53.71 window 91 times. The number of times they have closed​in the window just above $53.72? Seven times.​

This week, the shares closed at $54.13 on Monday and $53.99 on Tuesday after the Journal story was published.

Mr. Listokin’s histogram shows the dramatic drop-off. Even accounting for different methods, Mr. Listokin said the chance of this being a random occurrence is remote.

“The probability that this would happen by chance is essentially zero,” he said, noting that his findings offer “pretty clear evidence of manipulation.”


​Mr. Listokin said he’s working on a more detailed paper and plans to make the Dow action part of his class discussion.​

Who would benefit from Dow’s share price being below $53.72? Berkshire comes to mind, since it gets a $255 million annual dividend from Dow for helping finance its 2009 takeover of Rohm & Haas. Kuwait’s sovereign-wealth fund also helped fund the deal and owns $1 billion of Dow preferred securities.

When asked, Mr. Buffett declined to comment last week on whether he or his deputies at Berkshire were shorting Dow to exert downward pressure on the stock price. Under the original agreement, Berkshire was forbidden from engaging in short selling or hedging its preferred stake in Dow until April 2014. The clause ensured that Berkshire was locked into its investment in Dow and couldn’t reduce “the economic consequence” of ownership through a hedge.




http://www.wsj.com/articles/dow-chemicals-stock-action-works-in-warren-buffetts-favor-1472782317


I read this too but it says nothing about Kuwait’s investment. I think it's more likely them shorting than Berkshire but that is just my opinion.

John Hjorth

  • Hero Member
  • *****
  • Posts: 2819
« Last Edit: September 07, 2016, 04:30:12 AM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

dcollon

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1295

gfp

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1824


rb

  • Hero Member
  • *****
  • Posts: 2922
Re: Buffett/Berkshire - general news
« Reply #326 on: October 06, 2016, 05:55:24 PM »
Cash in now north of $70B. Time to bag another elephant!  :)

John Hjorth

  • Hero Member
  • *****
  • Posts: 2819
Re: Buffett/Berkshire - general news
« Reply #327 on: October 08, 2016, 02:06:26 AM »
Yes, net cash flows from operations is now about USD 2.5 B - per month. BRK could almost take out a CAT now - or easily a DEERE.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3543
Re: Buffett/Berkshire - general news
« Reply #328 on: October 11, 2016, 11:01:43 AM »
Cash is piling up faster than Warren Buffett can invest it
http://finance.yahoo.com/news/cash-piling-faster-warren-buffett-151851036.html

ourkid8

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1049
Re: Buffett/Berkshire - general news
« Reply #329 on: October 11, 2016, 12:43:58 PM »
I am waiting for a true elephant, ahem... KO!   Yes, it would require significant leverage however with over $1.5B/month coming in and with Berkshire AA credit rating, it is attainable. 

Cash is piling up faster than Warren Buffett can invest it
http://finance.yahoo.com/news/cash-piling-faster-warren-buffett-151851036.html