Berkshire Hathaway, chaired by Warren Buffett, sold off its entire stake in the industrial conglomerate General Electric (GE), according to filing with the Securities and Exchange Commission on Monday.
Berkshire had 10.4 million shares of the industrial giant. But GE was no longer among Berkshire’s top 20 shares, according to the filings.
Since the beginning of the year, GE’s share has dropped by 20%, while the DJIA index, of which it is a member, has also gained nearly 12%.
The conglomerate is going through a difficult period due to the fall in oil prices and the consequences on several of its sectors of activity.
In June, General Electric announced that CEO Jeff Immelt would retire and be replaced by veteran in the company, John Flannery. However, a July performance report further pressured the stock.
Upon leaving GE, Berkshire Hathaway added $17.5 million stake in Synchrony Financial, a credit card company originated from General Electric in 2015. GE finds itself in the sights of the investor Nelson Peltz who entered the capital of GE and claims significant cost reductions.
GE also presented in July results considered mediocre for the second quarter and blamed a “volatile” environment and a “slow growth” of the world economy.
Immelt made the bet to refocus GE on its industrial roots – manufacturing gas turbines, power plants, aircraft engines, medical equipment – mainly by selling financial assets, which had made the group the fifth financial institution Before the financial crisis of 2008.
The withdrawal of Mr. Buffett, whose decisions are still very much followed by the financial community, will increase the pressure on the title and the direction of the group to accelerate its recovery. Between May and August, it published the two most recent documents sent to the Securities and Exchange Commission (SEC) on the holdings of its financial holding company, Berkshire Hathaway.
Other changes in its portfolio include Warren Buffet acquiring shares of Synchrony Financial, a consumer lending company, which accounted for 4.01% to $30.83 at the same time. Buffett is the largest investor in American Express, which makes loans to credit card borrowers, as does Synchrony, based in Stamford, Connecticut. Berkshire also has stakes in MasterCard and Visa. Berkshire reduced its holdings in American Airlines, Delta Air Lines and United Continental Holdings.