Finance

Ajit Jain dumps more than half of his Berkshire Hathaway stake

Published

8 months ago

September 12, 2024

Business Finance News

Ajit Jain at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Ajit Jain, Warren’s Buffett’s insurance chief and top executive, sold more than half of his stake in Berkshire Hathaway, a new regulatory filing showed.

The 73-year-old vice chairman of insurance operations dumped 200 shares of Berkshire Class A shares on Monday at an average price of $695,418 per share for roughly $139 million. That left him holding just 61 shares, while family trusts established by himself and his spouse for the benefit of his descendants hold 55 shares and his non-profit corporation Jain Foundation owns 50 shares. Monday’s sale represented 55% of his total stake in Berkshire.

The move marked the biggest decline in Jain’s holdings since he joined Berkshire in 1986. It’s unclear what motivated Jain’s sales, but he did take advantage of Berkshire’s recent high price. The conglomerate traded above $700,000 to hit a $1 trillion market capitalization 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’s Robert H. Smith School of Business.

Berkshire Hathaway

It’s also consistent with a significant slowdown in Berkshire’s share buyback activity as of late. Omaha-based Berkshire repurchased just $345 million worth of its own stock in the second quarter, significantly lower than the $2 billion repurchased in each of the prior two quarters.

“I think at best it is a sign that the stock is not cheap,” said Bill Stone, CIO at Glenview Trust Company and a Berkshire shareholder. “At over 1.6 times book value, it is probably around Buffett’s conservative estimate of intrinsic value. I don’t expect many, if any, stock repurchases from Berkshire around these levels.”

The India-born Jain has played a crucial role in Berkshire’s unmatched success. He facilitated a push into the reinsurance industry and more recently led a turnaround in Geico, Berkshire’s crown jewel auto insurance business. In 2018, Jain was named vice chairman of insurance operations and appointed to Berkshire’s board of directors.

“Ajit has created tens of billions of value for Berkshire shareholders,” Buffett wrote in his annual letter in 2017. “If there were ever to be another Ajit and you could swap me for him, don’t hesitate. Make the trade!”

Before it was officially announced that Greg Abel, Berkshire’s vice chairman of non-insurance operations, will evenetually succeed the 94-year-old Buffett, there were rumors about Jain one day leading the conglomerate. Buffett recently clarified that Jain “never wanted to run Berkshire” and there wasn’t any competition between the two.

Finance

More Americans buy groceries with buy now, pay later loans

Published

4 hours ago

April 26, 2025

Business Finance News

People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.