Omaha, Nebraska – Renowned investor Warren Buffett announced during Berkshire Hathaway’s annual meeting that he has divested all shares in Paramount Global, incurring a substantial loss. Buffett took full responsibility for the decision, stating that it was entirely his own to invest in Paramount in 2022 despite contrary speculations. The stake in Paramount held by Berkshire Hathaway at the end of 2023 amounted to 63.3 million Class B shares, valued at approximately $800 million, contributing to a 10.1% equity ownership in the company.
Buffett’s critique of companies entering the subscription streaming market, including Paramount, was evident after investing in the company in 2022. The investor’s acknowledgment of his mistake in Paramount stock ownership prompted him to reflect on the entertainment industry’s dynamics and consumer behavior. The Oracle of Omaha acknowledged that his knowledge had expanded, although it came at a financial cost.
Paramount’s Class B shareholders expressed concern over the company’s merger negotiations with Skydance Media, fearing dilution. With Shari Redstone controlling a majority of Class A shares, discussions of a potential merger with Sony Pictures Entertainment and Apollo emerged. While Wall Street generally favored the Sony/Apollo deal, concerns regarding Paramount’s potential breakup and studio merger with Sony persisted, driven by historical ties to Sumner Redstone’s media empire.
The evolving landscape of the entertainment industry and investment decisions underscore the complexities faced by seasoned investors like Warren Buffett. As Berkshire Hathaway navigates the aftermath of the Paramount divestment, market reactions and internal deliberations within the company shed light on the implications of strategic portfolio adjustments in a dynamic market environment.