Updated May. 5, 2017 at 5:09 p.m.

Buffett dumps Big Blue, shares take 2.5% hit: 'I don't value IBM the same way ...'

Published: 2017-05-05 06:50:00
Updated: 2017-05-05 17:09:50

IBM                           IBM
Tags: IBM

Warren Buffett is backing away from Big Blue in a big way, disclosing to CNBC on Thursday that his Berkshire Hathaway firm has sold one third of its IBM stake.

The news sent IBM shares down 2.5 percent lower on Wall Street on Friday.

More than 12 million shares were traded, some three times the daily average.

"I don't value IBM the same way that I did six years ago when I started buying ... I've revalued it somewhat downward," Buffett told CNBC.

"When it got above $180 we actually sold a reasonable amount of stock."

IBM shares fell as low as $153 but rallied at 10 a.m. to $155.17. That surge still left IBM down $3.88 on the day, or some 2.5 percent.

Just before noon, shares were still down 2.4 percent, or $3.76, at $155.29.

Near the close, IBM was still down nearly 3 percent at $154.81, off $4.24.

They finished the day down $4, or 2.5 percent, at $155.05.

However, Buffett also pointed out that he doesn't plan right now to sell any more shares and could resume buying in the future.

Berkshire Hathaway kicks off its annual meeting Saturday.

Two days ago, Moody's downgraded IBM's senior unsecured rating.

IBM (NYSE: IBM) recently reported a loss in revenue for the 20th consecutive quarter.

"I think if you look back at what they were projecting and how they thought the business would develop I would say what they've run into is some pretty tough competitors," Buffett told CNBC. "IBM is a big strong company, but they've got big strong competitors too."

Buffett owned some 81 million shares of IBM as 2016 ended, ranking as one of the tech giant's biggest investors.

After hitting $182.78 on Feb. 16, IBM shares have since dropped to under $160, according to Reuters.

IBM employs thousands of people across North Carolina and operates one of its largest campuses in RTP.

Read more at:

http://www.cnbc.com/2017/05/04/warren-buffett-has-revalued-ibm-downward-cites-big-strong-competitors.html

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