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Buffett revisits Dexter Shoe deal as his “most gruesome” mistake
Berkshire paid about $433 million for Dexter Shoe in 1993 entirely with stock, with the real cost compounding as Berkshire shares later appreciated.
Berkshire Hathaway founder Warren Buffett has long characterized his 1993 acquisition of Dexter Shoe as a “gruesome mistake,” and the episode remains a cautionary case for corporate dealmaking, according to an analysis published by Yahoo Finance.
The article says Berkshire paid roughly $433 million for Dexter Shoe entirely in stock, described as about 25,203 Class A equivalent shares at the time.
It adds that Dexter Shoe deteriorated after inexpensive foreign imports undercut its domestic operations, and that the decision to use Berkshire shares as acquisition currency meant any overpayment or misjudgment was amplified over subsequent decades as Berkshire’s share price rose.
Yahoo Finance also notes Buffett discussed the error in his annual shareholder letters, writing that he gave away a piece of a “wonderful business” to acquire something that ultimately proved worthless.