Tuesday, November 15, 2011

Berkshire (BRK-A) Plows $10.7 Billion into IBM (IBM)

Throughout 2011, Warren Buffett revealed holding company Berkshire Hathaway (NYSE:BRK-A) has acquired about 10.7 billion to acquire shares of IBM (NYSE:IBM). That is over a 5 percent stake in the services company.

Along with IBM, Berkshire also invested in General Dynamics Corp. (NYSE:GD), Intel (NASDAQ:INTC) and DirecTV (NASDAQ:DTV), among others.

After moving from a hardware to a services business, IBM has become the largest provider of technology services in the world.

The stake held by Berkshire in IBM is apparently even larger, as some of the shares were acquired in the fourth quarter.

Presumably the moat Buffett sees in IBM is the stickiness of their services once they are hired by companies, as they are very slow to change, if at all, once IBM gets its foot in the door.

Buffett says the company paid approximately $170 an IBM share on average.

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