Warren Buffett-led Berkshire Hathaway has made headlines by completely divesting its 2.46% stake in One 97 Communications, the parent company of Paytm. The move resulted in a significant loss of about Rs 507 crore for the legendary investor.
Q: Why did Warren Buffett’s Berkshire Hathaway exit Paytm, and what was the financial outcome?
A: Berkshire Hathaway exited Paytm by selling its entire 2.46% stake at an average price of Rs 877.2 per share. The transaction, resulting in a Rs 507 crore loss, saw Ghisallo Master Fund and Copthall Mauritius Investment acquiring the shares.
Q: What prompted the exit, and how does it align with broader market trends?
A: Berkshire Hathaway’s exit follows a trend of key pre-IPO investors, including SoftBank, adjusting their positions as Paytm’s stock shows signs of recovery. The move reflects evolving investor sentiments and ongoing portfolio recalibrations in the financial market.
Q: What was the initial investment and the overall financial impact on Berkshire Hathaway?
A: BH International’s (Berkshire Hathaway) average cost of acquiring Paytm shares was Rs 1,279.7 per share. Despite initially selling shares during the IPO and the recent transaction earning nearly Rs 1,371 crore, Berkshire incurred a total loss of about Rs 507 crore from its Paytm investment.
Q: How did the market respond to the exit, and what does it indicate for Paytm’s future?
A: Prior to the exit, Paytm’s shares experienced a 3.23% decline, reaching Rs 893. The market response underscores the dynamic nature of investor sentiments, reflecting both challenges and opportunities for Paytm as it navigates its path to recovery.
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