Connect with us

Hi, what are you looking for?

Stock

Buffett says Berkshire “not competitive” with SPACs on deals

Stock Markets33 minutes ago (May 01, 2021 05:40PM ET)

(C) Reuters. FILE PHOTO: FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, pauses while playing bridge as part of the company annual meeting weekend in Omaha

By John McCrank

(Reuters) – Warren Buffett on Saturday compared the buying frenzy by special purpose acquisition companies, or SPACs, to gambling with other people’s money and said their activity has made it tough for his company, Berkshire Hathaway (NYSE:BRKa) Inc, to compete on deals.

Berkshire Hathaway has $70 billion to $80 billion it would “love to put to work,” but has not been able to under the current conditions, Chairman and Chief Executive Officer Buffett said.

“It’s a killer. The SPACs generally have to spend their money in two years, as I understand it. If you put a gun to my head and said you have to buy a big business in two years, I’d buy one, but it wouldn’t be much of one. We look and look,” Buffett said at Berkshire’s annual meeting.

SPACs are listed shell companies that raise funds to acquire private companies and take them public, allowing targets to sidestep the more onerous regulatory checks of an initial public offering.

More than $100 billion has been raised by U.S. SPACs, also known as blank-check companies, so far this year, while the value of SPAC mergers and acquisitions hit a record $263 billion, according to data from Dealogic.

“It’s a different equation that you have if you’re working with other people’s money where you get the upside, and you have to give it back to them if you don’t do something, and frankly, we are not competitive with that,” he said.

There are companies that are interested in being acquired by Berkshire, but it would be difficult for them to do so because a SPAC bidder would counter with a higher offer, Buffett said.

“That won’t go on forever, but it’s where the money is now,” he said.

Buffett says Berkshire “not competitive” with SPACs on deals

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved