As per latest news, Berkshire Hathaway of Warren Buffet lost about $4.3 billion in just one day as the Kraft Heinz shares plunge down due to bad news. Kraft Heinz is the largest holdings of the investor Berkshire.
The famous Kraft Heinz Company is worldwide known for some of its most famous products such as tomato ketchup, cheese, and so on. The brand aw a plunge of about 27 % on Friday and it finally closed at $34.95. Berkshire had ownership of about 35 million shares on the brand and hence it saw a steep loss too. There are many other big holdings that of the investor have such as Apple, Coca Cola, and many of the banks.
Berkshire by now is one of the most reliable money managers. This is because the investor does not believe much in the short term results, rather offers tactics that can be helpful in long term profit goals.
Though the investor has proven in past about how investment in these strong brands can offer huge benefits, currently some of the decisions are costing his followers too. Not just Heinz, even Coca Cola saw a steep fall of 4.5 % though it managed to hike up by 6 %. Similarly, prior to the loss of 27 % this Friday, Coca Cola has noticed a prior loss of about 28 % also in the last 12 months.
Though there are such incidents occurring in case of the prepackaged food item giants, Berkshire has still defended his decisions and ideas in a recent interview. As per him, it is quite difficult to draw out the money from such brands because they are still doing great.
Talking about the loss, the chief financial officer of Kraft foods, David Knopf has mentioned that there have been internal investigations conducted after which the company received a subpoena from the Securities and Exchange Commission. The company has also claimed that after getting the subpoena, the brand has earned about 87 cents on each share. The brand has also mentioned that there has been an increase of about $25 million in its cost of production.
It seems the loss session is continued with different big brands currently. Recently, Tesla has also experience stock fall due to the consumer reports for the recommendation of the Tesla Model 3.
Tesla’s stock ran down by about 4% as the report said that they are pulling out the recommendation due to the reliability issues of the model. The consumer report organization has lately mentioned about some of the various defects in the Tesla model-3 car such as easily cracking windows and loose body that makes the car unreliable for the customers.
Though CEO Bernard Hees as claimed about an improvement in the manufacturing but the aggressiveness in the production part may have caused such manufacturing defects.
Currently, Tesla is trying its best to make up the loss but as of now the stock value of the brand closed at $291.23 that is about 3.7% loss and the lowest as of now.