Matt Levine, Columnist

Warren Buffett Funds an Elephant

Also a Twelfth Law of Insider Trading, Tether, bad tweets and joke tweets.

April 30, 2019 at 4:00 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Warren Buffett has spent years now talking about how he wants to use Berkshire Hathaway Inc.’s giant pile of cash to do “elephant” acquisitions, mostly without actually doing any. You can sympathize. Valuations are high, competition for deals is intense, and a big acquisition is a big concentrated risk. If you buy a big thing, it might turn out to be worth less than you paid for it, and then where will you be?

On the other hand there is a lot to like about Buffett’s approach of financing other people’s elephant acquisitions: