Berkshire Hathaway Inc.’s Class B shares (NYSE: BRK.B) experienced a decline on May 13, 2025, closing at $514.30, down 0.08% from the previous day. This movement follows the recent announcement by CEO Warren Buffett regarding his planned retirement at the end of the year, marking the end of an era for the conglomerate.
Buffett’s Retirement Announcement
At 94, Warren Buffett has led Berkshire Hathaway for six decades, transforming it from a struggling textile company into a diversified conglomerate with a market capitalization exceeding $1 trillion. His decision to step down has been anticipated, with Vice Chairman Greg Abel named as his successor. Abel, who oversees Berkshire’s non-insurance operations, is expected to continue the company’s long-standing investment philosophy.
Market Reaction
The stock’s recent performance reflects investor uncertainty about the company’s future leadership. While Berkshire Hathaway’s diversified portfolio and substantial cash reserves provide a strong foundation, the transition raises questions about strategic direction and investment decisions post-Buffett.
Financial Overview
In the first quarter of 2025, Berkshire Hathaway reported a 14% drop in operating profits to $9.6 billion, primarily due to a 49% decline in profits from its insurance underwriting division. Despite the earnings slump, the conglomerate increased its cash reserves to a record $348 billion by continuing its trend of net selling stocks for the 10th consecutive quarter. This conservative approach reflects Buffett’s cautious stance amid high market valuations.
Looking Ahead
As Berkshire Hathaway navigates this leadership transition, investors will closely monitor how Greg Abel steers the company. Maintaining the conglomerate’s disciplined investment strategy and capital allocation will be crucial in sustaining investor confidence. The coming months will reveal how the market adjusts to this significant change in one of America’s most iconic companies.
