Just a few weeks ago , Warren Buffett said in an interview with Yahoo Finance that he will not sell airline stocks as he is, as always, in it for a long run. But now a completely surprising turn by Mr. Buffett.
In an application for approval from Buffett’s holding company Berkshire Hathaway we can see that he has reduced its stake in DELTA AIR LINES, INC. [ DAL ] by 13 million shares and its stake in Southwest Airlines by 2.3M shares.
On the same day, Delta Air Lines announced that it anticipates a 90% drop in revenue in the second quarter of 2020.
“We continue to shrink our network as demand falls and will operate just enough flying to maintain essential services. “- CEO, Ed Bastian said in his letter to employees.
As a long-term investor, Warren Buffett cannot be disturbed by short-term turbulence on the stock exchange, so we thought. About a month ago – before his interview with Yahoo Finance – he even increased his stake in Delta Air Lines. The fact that he is now selling shares in his airlines shows that something must have changed fundamentally in his assessment of the future business development of these companies. At least that is how the majority will look at these sales.
Buffett actually reduced its holding in these 2 companies to under 10% so the future selling will not need to be reported to SEC!
Buffett will probably comment on these sales at the Berkshire Hathaway Annual Shareholders Meeting on May 2 , streamed live by Yahoo Finance.