Warren Buffett has spent another $1.5 billion U.S. to buy 27.1 million shares of Occidental Petroleum (OXY), binging the stake of his holding company Berkshire Hathaway (BRK.B) to 118.3 million shares valued at $6.9 billion U.S.
A Securities and Exchange Commission (SEC) filing revealed the latest purchases were made last week at prices between $51.03 U.S. and $58.58 U.S. The weighted average of the buys is around $56.60 U.S.
Occidental Petroleum is now the 9th biggest holding in Berkshire Hathaway’s portfolio. And Berkshire Hathaway owns nearly 12% of Occidental’s outstanding shares.
When its warrants to buy nearly 84 million shares, obtained as part of its 2019 deal that helped finance Occidental’s purchase of Anadarko, are included, Berkshire Hathaway’s stake in the oil company is nearly 20%.
The warrants have an exercise price of $59.624 U.S., which means they are a few cents away from being “in the money.” Berkshire Hathaway could then use them to buy at a price lower than the market price, generating an instant paper profit, which increases as the stock prices goes up.
Occidental Petroleum shares are up nearly 90% over the last 12 months as oil prices have surged. Berkshire Hathaway’s class B stock reached an all-time high on Friday and are up 9% so far this year at $326.60 U.S