Member Article

Warren Buffett sells shares in 'mistake' Tesco as prices plunge 50%

Warren Buffett’s Berkshire Hathaway investment company has sold more than 245 million shares in supermarket giant Tesco, bringing its holding to below 3%.

Buffett said his decision to invest in Tesco had been a “huge mistake” as the supermarket giant’s share price has plunged by over 50% in the last year after falling sales and accounts reporting.

Berkshire Hathaway owned 3.7% of Tesco at the end of 2013, a stake worth about £1 billion.

This is yet another blow for the stuggling supermarket after it came to light that it had overstated its profits by £250 million, leading to the suspension of several employees.

The Financial Conduct Authority has also confirmed it is investigating the issue.

Tesco has also struggled in the face of increased competition from discount retailers such as Aldi and Lidl, and the failure of some of its international ventures.

Buffett told CNBC in early October: “I made a mistake on Tesco. That was a huge mistake by me.”

His portfolio of investments include well-known brands such as Coca-Cola, IBM and American Express.

Berkshire Hathaway began building a stake in Tesco in 2006, and by 2012 owned more than 5% of the business.

This was posted in Bdaily's Members' News section by Clare Burnett .