Warren Buffet’s Berkshire Hathaway Inches Towards $1 Tn Market Cap
Warren Buffett-led Berkshire Hathaway is edging closer to USD 1 trillion in market value following its announcement of a second consecutive year of record-breaking annual profits.
The firm’s Class A shares saw a 1.4 per cent increase in trading, while Class B shares, which hold higher voting rights, gained 1.3 per cent. With a market capitalisation exceeding USD 915 billion, Berkshire Hathaway now stands as the largest financial firm in the United States.
In his annual letter to shareholders, Buffett tempered expectations for future share price growth, expressing caution about the limited number of lucrative investment opportunities available. Despite holding a substantial cash pile of USD 167.6 billion, Buffett said that the company would likely outperform the average American corporation but cautioned against expecting extraordinary performance.
Buffett also addressed the passing of his longtime second-in-command, Charlie Munger, in the shareholder letter, while reassuring investors about the readiness of Greg Abel, Berkshire Hathaway’s vice chairman and designated successor, to assume the CEO role.
The company’s annual operating profit surged by 21 per cent to reach USD 37.4 billion, driven by improved underwriting and higher investment income from its insurance segment. The fourth-quarter operating profit also exceeded analysts’ expectations.
However, Berkshire Hathaway faces potential challenges, as its PacifiCorp unit has come under scrutiny from the US government. Allegations have surfaced regarding the unit’s failure to cover USD 356 million in costs associated with the 2020 Slater wildfire in southern Oregon and northern California. This legal threat could pose complications for the conglomerate in the near future.
