Check out the companies making headlines in midday trading: Apple — Shares ticked up roughly 2% ahead of the iPhone maker’s second-quarter results due after the closing bell. Peloton — Shares dropped 13% after the exercise equipment company announced Thursday that CEO Barry McCarthy will be stepping down and that the company will lay off 15% of its staff, or about 400 employees, to “bring its spending in line with its revenue.” Peloton’s fiscal third-quarter results also missed Wall Street’s earnings and revenue expectations. Qualcomm — Shares rose more than 9% after the chipmaker on Wednesday posted $2.44 per share in adjusted earnings for its latest quarter, topping analysts’ estimates of $2.32 per share, according to LSEG. The top end of Qualcomm’s revenue forecast for the current quarter was higher than the Street’s expectations, with the company citing demand for smartphones that require the most advanced chips. Wayfair — The home furniture retailer jumped 13.5% after beating expectations on both lines. Wayfair said it lost 32 cents per share on an adjusted basis, narrower than the estimate of a loss of 44 cents from analysts polled by LSEG. Revenue came in at $2.73 billion, above the consensus forecast of $2.64 billion. Carvana — Shares surged more than 32% after the used car retailer notched its best-ever quarterly earnings report. Cigna — Stock in the insurance provider fell 2.5% despite surpassing Wall Street estimates on the top and bottom lines in the first quarter. Cigna also reaffirmed its prior guidance for the full year. Moderna — The vaccine maker popped more than 7% after posting a smaller-than-expected loss for the first quarter as it trims costs. Moderna also reiterated its full-year guidance. DoorDash — The food delivery service fell nearly 14% after DoorDash posted a loss of 6 cents per share in its first quarter, wider than the loss of 4 cents per share anticipated by analysts polled by LSEG. However, the company’s revenue came in at $2.51 billion, above the $2.45 billion consensus. Etsy — Shares plummeted 15% after posting an earnings miss in the first quarter. Etsy reported adjusted earnings of 48 cents per share, while analysts polled by LSEG called for 49 cents a share. Revenue of $646 million came in line with expectations. Zillow — The real estate marketplace operator saw its stock slide 5% after it issued weak guidance for the current quarter. Zillow estimated second-quarter revenue of $525 million to $540 million, while analysts were expecting $559.2 million, according to FactSet. eBay — Shares pulled back nearly 3% after the e-commerce company issued lower-than-expected second-quarter guidance. EBay said it expects revenue in the range of $2.49 billion to $2.54 billion, while analysts polled by LSEG forecast $2.56 billion. Shake Shack — The restaurant chain climbed more than 2% in midday trading after first-quarter adjusted earnings of 13 cents per share beat a Wall Street forecast that called for 10 cents, according to analysts polled by LSEG. Revenue was largely in line with expectations. Qorvo — The semiconductor stock pulled back more than 14% on the heels of weaker-than-expected first-quarter earnings guidance. Qorvo now expects earnings of 60 cents to 80 cents per share, while analysts polled by FactSet expected $1.27. — CNBC’s Pia Singh, Tanaya Macheel, Samantha Subin, Hakyung Kim, Lisa Kailai Han and Alex Harring contributed reporting.
OMAHA, Nebraska — Warren Buffett said Saturday his designated successor Greg Abel will have the final say on Berkshire Hathaway’sinvesting decisions when the Oracle of Omaha is no longer at the helm.
“I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting. “If you understand businesses, you’ll understand common stocks.”
Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger inadvertently made the revelation at the shareholder meeting. Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail.
Buffett offered the clearest insight into his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investing icon, who’s turning 94 in August, said his decision is influenced by how much Berkshire’s assets have grown.
“I used to think differently about how that would be handled, but I think that responsibility should be that of the CEO and whatever that CEO decides may be helpful,” Buffett said. “The sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. It just doesn’t work.”
Berkshire’s cash pile ballooned to nearly $189 billion at the end of March, while its gigantic equity portfolio has stocks worth a whopping $362 billion based on current market prices.
“I think what you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things,” Buffett added. “I think the responsibility ought to be entirely with Greg.”
While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio, where Buffett has garnered a huge following by racking up huge returns through investments in the likes of Coca-Cola and Apple.
Berkshire investing managers, Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock portfolio (about 10%) for about the last decade. There was speculation that they may take over that portion of the Berkshire CEO role when he is no longer able.
But it seems, based on Buffett’s latest comments, that Abel will have final decisions on all capital allocation — including stock picks.
“I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move,” Buffett said.
Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s equity portfolio is worth $362 billion. A previous version misstated the figure.
Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”
Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.
Paramount
Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war.
OMAHA, Neb. — Warren Buffett said that Berkshire Hathaway is looking into an investment in Canada.
“We do not feel uncomfortable in any shape or form putting our money into Canada,” he told an arena full of investors Saturday. “In fact, we’re actually looking at one thing now.”
The billionaire investor has placed bets in the country in the past. He’s previously taken a roughly $300 million position in Home Capital Group that investors took as a vote of confidence in the troubled Canadian mortgage underwriter.
The “Oracle of Omaha” said during the annual shareholder meeting that he does not expect to make significant bets outside the U.S., saying his recent investments in Japanese trading houses were a compelling exception. But Buffett noted the similarity in operations between the Canada and the U.S.
“There’s a lot of countries we don’t understand at all,” Buffett said. “So, Canada, it’s terrific when you’ve got a major economy, not the size of the U.S., but a major economy that you feel confident about operating there.”
Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogen | CNBC
Buffett did not reveal the specific company he’s looking at north of the border or whether it was public or private.
“Obviously, there aren’t as many big companies up there as there are in the United States,” Buffett said. “There are things we actually can do fairly well that Canada could benefit from Berkshire’s participation.”
Canada’s S&P/TSX Composite Index is up about 5% this year. The economy has large financial and commodity industries.