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Berkshire boosts Alphabet stake as Google placement prices trade lower
Berkshire’s $10 billion private placement was priced above Alphabet’s subsequent Class A and Class C closing levels, leaving part of the position underwater.
Berkshire Hathaway increased its holdings in Alphabet, the parent of Google and YouTube, during the second quarter, according to a Yahoo Finance summary of Reuters coverage and a Securities and Exchange Commission filing. Berkshire’s stake rose 83% to roughly 106 million shares worth about $37 billion, making Alphabet its third-largest stock position behind only Apple and American Express.
The filing also shows that about 60% of the shares Berkshire added last quarter did not come from the open market, but instead were received via a $10 billion private placement tied to Alphabet’s June equity raise. Berkshire took $5 billion of Class A stock at $351.81 per share and $5 billion of Class C stock at $348.20 per share, based on the SEC filing.
The placement pricing later faced a setback as Alphabet’s Class A shares closed at $345.90 and Class C at $343.54, both below the placement prices. Using those closing levels, the source calculation indicates the largest single chunk of Berkshire’s Google position is about $150 million underwater, after the discount effectively inverted.
The source notes that it is unusual for a company with substantial cash and securities to sell shares at a discount to a single buyer, and it highlights the timing as Alphabet sought a marquee name on its cap table through the private placement.