Not Everyone is Excited About Buffett’s 11.4% Stake in HP

Not Everyone is Excited About Buffett’s 11.4% Stake in HP

According to Reuters, “HP Inc’s (HPQ.N) stock soared to a record high [on April 7, 2022], after billionaire Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) said it had taken an 11.4% stake valued at about $4.2 billion in the maker of personal computers and printers.”

This makes Buffett’s Berkshire the largest shareholder of HP. According to one analyst, it’s a sign that “HP is still a valuable company.” HP beat revenue expectations in the first quarter of 2022 and “offered up an upbeat outlook despite ongoing supply-chain constraints and a slowing PC market.”

Reuters also reported, “shares of HP closed up $5.15, or 14.8%, at $40.06, after earlier rising to $41.46.” The news agency explained that “companies’ stock prices often rise when Berkshire discloses new stakes, regarded as a stamp of approval from Buffett.”

Ray Stasieczko Reacts

Click here to watch “End of the Day with Ray” featuring Stasieczko’s commentary on Buffett and HP.

However, not everyone is getting excited about Buffett’s investment in HP. Within hours of the news, industry commentator Ray Stasieczko delivered a video blog saying there has been a huge overreaction. In his regular “The End of the Day with Ray,” Stasieczko (pictured), says he has attended Buffett’s meetings and lectures and has huge respect for the investor.

“Buffett’s $4.2 billion seems like a huge sum of money, but it is really only 3% of the cash he has available,” he added. “It’s a bit like a person on a $100,000 a year income making a $3,000 investment. Buffett has only invested pocket change in HP!”

Stasieczko also reminds his audience that Buffett has admitted to making 15 well-documented investment mistakes. “This may very well be his 16th,” said Stasieczko. “There’s no doubt that HP already has the lion’s share of the printer market, but Buffett must be hoping that in a declining market, HP will be the last one standing if he is going to get a return non his investment.”

Stasieczko also provides a list of HP “insiders” who have all been selling off their shares in HP in recent times. “What do these people know that Buffett doesn’t know,” added Stasieczko.

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