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Berkshire Hathaway has started buying its own shares for the first time in 22 months as new chief executive Greg Abel deploys a record cash pile of nearly $400bn.
The repurchases, which began on Wednesday, are the first to be authorised by Abel since he took over from chair Warren Buffett at the start of the year and signal a belief that the shares are trading below their inherent worth.
The $1.1tn conglomerate, which spans insurance, railroad and industrial businesses, does not typically announce that it is in the market buying back its shares.
Repurchases are normally disclosed as part of its quarterly financial statements, and the last reported buybacks were completed in May 2024.
“In the interest of transparency with our leadership transition, we are disclosing that we commenced repurchasing shares,” the company said in a filing with the US Securities and Exchange Commission.
Abel’s ascent marks a pivotal moment for the investment giant, as shareholders look for signs of how he will shape the company, as well as insight into his investment acumen.
In his first annual letter to shareholders at the weekend, the 63-year-old said he viewed share repurchases as an “important capital allocation option”, together with investments in publicly listed stocks and outright acquisitions.
“We will buy back Berkshire shares when they trade below our estimate of intrinsic value, conservatively determined, ensuring that repurchases enhance per-share value for continuing owners,” he wrote.
The purchases allowed shareholders to “own an incrementally larger piece of Berkshire’s businesses, without deploying any additional capital of their own”, he added.
The company last year amended its share buyback programme ahead of Abel’s ascent and the new policy allows him to initiate share repurchases after consulting Buffett, who has long had discretion on buybacks.
Buffett and Abel have not divulged a specific formula that is used to judge Berkshire’s intrinsic value when considering buybacks. Investors have instead looked to the company’s price-to-book ratio, a measure of its market capitalisation to the value of the assets it owns.
Bill Stone, chief investment officer at Berkshire investor Glenview Trust, said Buffett had last initiated buybacks when the stock was trading between 1.4 and 1.5 times above its book value in 2024.
“With the stock’s recent sideways performance, the valuation at a little over 1.5 times is nearing a level where repurchases might resume,” Stone said. “Still, Greg Abel’s judgment about its intrinsic value relative to other uses of capital can differ from the simple price-to-book ratio.”
The company’s holdings of cash and short-term Treasury bills rose to $373bn at the end of 2025, a record when excluding the value of US government debt it had bought but not yet paid for.
The sum is not an unlimited kitty from which Abel can draw for investments or buybacks. Much of it is held to offset liabilities that Berkshire’s insurance subsidiaries may one day have to pay out.
It also maintains large cash levels to meet regulatory requirements, given that its insurers are invested in publicly listed stocks rather than investments that policymakers judge to be less risky, such as government debt or asset-backed securities.
Berkshire did not respond to a request for comment.
https://www.ft.com/content/84eb99e9-160e-4bb7-9da3-41ccbda5d42b
