Ajit Jain sells over half his Berkshire stake

Ajit Jain, Warren Buffett’s top insurance executive, has sold more than half of his stake in Berkshire Hathaway. Jain sold 200 shares of Berkshire Class A stock on Monday at an average price of $695,418 per share. The total sale was about $139 million.

Berkshire Hathaway (+26.3%) has outperformed the S&P 500 (+19.6%) and 4 of the largest 6 stocks: Microsoft (+15.8%), Alphabet (+17.1%), Apple (+18.5%), and Amazon (+26.1%) year-to-date. #Buffett $BRK.A $BRK.B

— David Kass (@DrDavidKass) September 21, 2024

After the sale, Jain holds just 61 shares directly. Family trusts set up by Jain and his wife for their descendants hold another 55 shares. Jain’s nonprofit, the Jain Foundation, owns 50 more shares.

Berkshire sold another $896 million of its stake in Bank of America on September 17, 18, and 19 at an average price of $40.23. #Buffett $BRK.A $BRK.B https://t.co/1GNxi2t2eF

— David Kass (@DrDavidKass) September 20, 2024

Monday’s sale was 55% of Jain’s total stake in Berkshire. It was the biggest drop in his holdings since he joined the company in 1986. The reason for Jain’s sale is not clear.

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Updates on Ajit Jain, Bank of America, Chevron, Oriental Trading Company, BNSF Railway, Occidental Petroleum and more in today's issue.https://t.co/FLeMsRRtK6

— Kevin Carpenter (@kejca) September 20, 2024

But it happened at the same time that Berkshire’s stock price was near a record high. The company was trading above $700,000 at the end of August. “This appears to be a signal that Ajit views Berkshire as being fully valued,” said David Kass, a finance professor at the University of Maryland. The sale also lines up with a slowdown in Berkshire buying back its own stock. The company bought back much less of its stock in the second quarter compared to previous quarters.

Ajit Jain reduces Berkshire holdings

“I think at best it is a sign that the stock is not cheap,” said Bill Stone, CIO at Glenview Trust Co. Stone is a Berkshire shareholder. Jain, who was born in India, has been very important to Berkshire’s success. He led the company’s move into the reinsurance business. More recently, he turned around Geico, Berkshire’s auto insurance unit. In 2018, Jain was named vice chairman of insurance operations. He was also appointed to Berkshire’s board of directors. Ajit has created tens of billions of value for Berkshire shareholders,” Buffett wrote in his 2017 annual letter. “If there were ever to be another Ajit and you could swap me for him, don’t hesitate. Make the trade!” There was speculation that Jain might eventually lead Berkshire after the 94-year-old Buffett. But Buffett recently made it clear that Greg Abel, Berkshire’s vice chairman of non-insurance businesses, will succeed him. Buffett said Jain “never wanted to run Berkshire” and there was no competition between Jain and Abel. Jain selling a large part of his Berkshire stake may show what he thinks about the stock’s current value. As Berkshire continues to navigate the markets, Jain still has a big influence on the company’s strategy.