Investor extraordinaire Warren Buffett’s Berkshire Hathaway and some hedge funds have indicated they have sold their shares of General Motors—in some cases completely—in recent months due to recalls involving faulty ignition switches.
Automotive News reports that Berkshire reduced its stake in General Motors by 25 percent through the first quarter of 2014, while Greenlight Capital Inc. sold all of its 17 million shares.
“While a number of factors have pushed GM stock downward recently, the controversy around the ignition switch recall appears to have had a chilling effect, and has underscored the idea that despite attractive valuation, GM might perpetually be a value trap,” says Barclays Plc analyst Brian Johnson in a May 14 report.
But it’s not all doom and gloom for General Motors in the investor world—Appaloosa Management LP raised its holdings to about 7.9 million shares, and Hayman Capital Management LP increased its position in GM by 54 percent to about 7.1 million shares.
General Motors shares closed at $34.36 yesterday, a drop of 1.7 percent.
Comments
It’s just as many people feared; the market is slowly but surely reacting to the mass recalls. All the GM loyalists had better hope this isn’t a growing trend!
Actually Buffet is a market manipulator.
He was praising GM last week and selling this week.
Once the price is down the will buy again.
What he doe is legal and I do not contest that but so many hate investors and praise Warren while he is no different any other big investor out there.
The market will go soft for a short while and when the price is right funds will buy up GM again. They are only bracing for the impact of the Justice Departments fine and cost reports for the 3rd quarter and after that they will return.
Although I don’t own any GM stock, I am still a diehard GM fan and in it for the long haul. As usual these people dumping, to me don’t seem to be very loyal.
When it comes to investing loyalty has noting to do with it.
If you are working a fund you are responsible to increase the members investment. Keep in mind these funds are responsible to yes some wealthy investors but also every day average peoples 401 K.
If you do not make money you lose your fund and your job.
They just expect a drop when GM reports lower earnings but will come back as the cycle comes back around.
Buffet just ticks me off as he is high profile and manipulates things in the open market but seldom takes a hit for it while others get crucified.
Rats leaving a sinking ship.