Billionaire Warren Buffett revealed that his investment company, Berkshire Hathaway, unloaded its stake in Paramount – and it will cost them.
During the company's annual shareholder meeting on Saturday, Buffett took responsibility for selling Berkshire's stake in the entertainment company.
“I was 100% responsible for Paramount's decision,” Buffett he told the audience. “It was 100% my decision, and we sold them all, and we lost a lot of money. That happens in this business.”
Saturday's meeting marked Buffett's first annual shareholder meeting without Vice Chairman Charlie Munger, who passed away in November last year.
Connected: Paramount is laying off hundreds of employees just days after the blockbuster hit Super Bowl LVIII
In May 2022, Buffett and Berkshire bought a $2.6 billion worth of shares in Paramount and more in November later that year, which put the company's total stock holding at over 91 million shares. This made Berkshire the company's largest non-voting shareholder. At the time of the purchase, the shares were valued at approximately $1.7 billion.
According to filings with the US Securities and Exchange Commission, Berkshire Hathaway owned 63.3 million Class B shares at the end of the fourth quarter 2023 after the company began unloading its shares. The stock was worth about $800 million at the time.
Warren Buffett heads to a breakfast session at the Allen & Company Sun Valley conference on July 13, 2023 in Sun Valley, Idaho (Kevin Dietsch/Getty Images)
Owning Paramount made me think even deeper, but I certainly looked more into the whole question of what people do with their free time and what the governing principles are for running an entertainment business of any kind, whether it's sports or movies or whatever. either. to be,” Buffett said during Saturday's meeting. “I think I'm smarter now than I was a few years ago, but I also think I'm poorer because I got the knowledge the way I did.”
Paramount, the parent company of CBS, Nickelodeon and MTV, has had a tough couple of years due to fierce competition in the broadcast industry and a move away from traditional cable media.
Last year, the company dramatically cut its dividend, which Buffett DESCRIBED as “bad news”.
Paramount fired approx 800 employees in February, despite the “blockbuster” success of the Super Bowl LVIII broadcast, as the company aims to “return the company to profitable growth.”
Last week, Paramount CEO Bob Bakish fell downputting executives Chris McCarthy, George Cheeks and Brian Robbins in a position to temporarily share the role as the “Office of the CEO”.
Connected: Read Warren Buffett's annual letter to Berkshire shareholders
Then, days laterSony Pictures and Apollo Global Management reportedly sent a joint letter to Paramount Group expressing interest in acquiring the company in a joint deal for $26 billion.
The offer comes amid a separate request by Skydance Media to Paramount's special committee to recommend an offer for Skydance to buy the company from majority shareholder Shari Redstone.
Meanwhile, Paramount reported a strong Q1 2024, supported by 51% year-over-year growth in Paramount+ and record viewership numbers for Super Bowl LVIII – the most-watched Super Bowl of all time.
“It was a record quarter for Paramount+ in engagement and revenue, and in the DTC segment, as we continued to significantly narrow streaming losses,” Paramount CFO Naveen Chopra said in a release of earnings last week. “As we look forward, we remain focused on executing and transforming our cost base to best position Paramount for the future.”
Paramount has not commented publicly on the offers or potential acquisitions. company was down up 20% in a year as of Monday afternoon.