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Warren Buffett Chooses to Offload Its Paramount Investment

At the annual meeting of Berkshire Hathaway, Warren Buffett, the Chairman and Chief Executive, announced the company’s complete divestment from Paramount.

Buffett personally took charge of the decision, stating, “I opted to completely sell off our Paramount holdings. This choice was mine alone, resulting in substantial losses for us.”

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By the conclusion of 2023, Berkshire Hathaway had entirely liquidated its original stake of 63.3 million Paramount shares, having already reduced its position by approximately a third in the fourth quarter of the preceding year.

During the first quarter of 2022, Berkshire Hathaway procured a stake without voting rights in Paramount’s class B shares. However, Paramount encountered several hurdles including a dividend reduction, earnings falling short of expectations, and the departure of its CEO. The media giant’s shares plunged by 44% in 2022 and a further 12% in 2023.

Recent potential buyers such as Sony Pictures and the private equity company Apollo Global Management have displayed interest in acquiring Paramount for about $26 billion. Talks have also been held with Skydance Media, headed by David Ellison, regarding a potential acquisition.

Paramount has been grappling with dwindling revenue due to the transition from traditional pay-TV and persistent deficits in its streaming services. The company’s stock has continued its downward trend this year, declining by nearly 13%.

Buffett’s evaluation of the failed Paramount venture has prompted him to mull over altering his recreational preferences. He has underscored the cutthroat and oversaturated streaming sector, where companies compete for viewer attention and resources.

Image Source: Kent Sievers / Shutterstock

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