Tech

Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

Can Apple continue its rebound? Berkshire Hathaway seems to think so. 

Second Bite
Apple shares have climbed 21 percent since Berkshire Hathaway disclosed its stake in the tech giant
Source: Bloomberg

The Warren Buffett-led conglomerate reiterated its support in the tech behemoth (despite declining iPhone sales), boosting its stake to 15.2 million shares as of June 30, up from 9.8 million at the end of the first quarter. Its confidence in the stock has already been rewarded. And for folks that followed the firm into the trade, they've experienced a 17 percent jump since Berkshire first disclosed its stake on May 16. 

It's not clear exactly when in the first quarter Berkshire went bobbing for a bargain. But assuming it bought in at the first quarter's volume-weighted average price of $97.61, it has made a paper profit on that first parcel of shares of $116 million. And assuming it topped up its stake at the second-quarter volume-weighted average price of $97.73, its paper profit on that added stake is already around $64 million. On top of that, Berkshire earned roughly $14.2 million in dividends.

To be sure, Buffett didn't have a hand in the initial investment and likely wasn't involved in the latest one, either. The first purchases were carried out by one of two investment managers, Todd Combs or Ted Weschler, who have the ability to take smaller positions such as this one without prior approval. 

Even though it's small change to Berkshire and Buffett, if bets like this continue to perform there's every chance the scope of Combs's and Weschler's free reign will widen. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Gillian Tan in New York at gtan129@bloomberg.net

To contact the editor responsible for this story:
Beth Williams at bewilliams@bloomberg.net