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Berkshire Hathaway led by chairman and CEO Warren Buffett anticipates Apple to use the huge cash reserve to exploit emerging coronavirus opportunities.
Apple Inc (NASDAQ: AAPL) stock closed Monday trading at $127.79, up 5.39%. Meanwhile, AAPL stocks were up approximately 0.78% during the after-hours trading session. The spike on Monday was perhaps attributed to news that Berkshire Hathaway Inc (NYSE: BRK) now controls approximately 5.4% of the total Apple outstanding shares.
Consequently, BRK stocks also jumped in a single-digit to close the day trading at $249.21, up 3.62%. The announcement by Berkshire Hathaway was made during the annual letter to investors that was published over the weekend.
The investment giant has been purchasing Apple stocks for the past few years based on the future growth prospects of the company. “Berkshire’s investment in Apple vividly illustrates the power of repurchases. We began buying Apple stock late in 2016 and by early July 2018, owned slightly more than one billion Apple shares (split-adjusted). Saying that I’m referencing the investment held in Berkshire’s general account and am excluding a very small and separately-managed holding of Apple shares that was subsequently sold. When we finished our purchases in mid-2018, Berkshire’s general account owned 5.2% of Apple.” The letter indicated.
Interest of Berkshire Hathaway in Apple
During the height of the pandemic, Apple has significantly reorganized its share market. Whereby apart from the stock split, the company has been involved in buybacks to control the overall market price. Berkshire Hathaway apparently has greatly benefited from the buybacks and commends of the Apple administration.
Despite the coronavirus disruptions, Apple stocks managed to rally approximately 71.07% last year. Besides, they are up approximately 7.34% in the last three months. Apple remains one of the most valuable tech companies with a market capitalization of around $2.04 trillion. The company has a total of 16.79 billion outstanding shares.
Berkshire Hathaway led by chairman and CEO Warren Buffett anticipates Apple to use the huge cash reserve to exploit emerging coronavirus opportunities. It is reported that Apple could venture into the electric vehicle industry and also the crypto industry in the future. For the latter, it is anticipated that Apple could integrate crypto exchange capabilities to its pre-installed wallet on its devices. Notably, Apple sells millions of iPhones globally every year. Thereby making the crypto investment more likely as the crypto industry gets adopted by institutional investors and retail investors globally.
Notably, Apple stocks could also have responded to news that the company has reopened over 270 United States retail stores on Monday. Retail stores remained closed the better part of last year to assist in coronavirus pandemic control. The reopening reassured investors of higher revenue in the coming quarters.