Greg Abel Bets on Berkshire With $4.5 Billion Share Buyback
Berkshire Hathaway's new CEO Greg Abel has committed $4.5 billion to repurchase company shares, signaling confidence in the conglomerate's future despite skepticism following Warren Buffett's departure.
Greg Abel, who took over as CEO of Berkshire Hathaway in January, has moved decisively to put his own stamp on the trillion-dollar conglomerate. In a second-quarter filing, the company revealed that Abel spent a significant portion of Berkshire's massive cash reserves, including $4.5 billion to repurchase Berkshire Hathaway's own shares. The buyback, disclosed in three separate sections of the filing, represents a bold public bet on the company's intrinsic value at a time when its share price has already reached all-time highs.
The filing states that Berkshire's repurchase program permits buybacks whenever the CEO, after consulting with Chairman Warren Buffett, believes the price is below Berkshire's conservatively determined intrinsic value. Berkshire's Class B shares closed at just under $540 during the quarter, an all-time high, and are up more than 4 percent over the past quarter. By repurchasing shares at those levels, Abel and Buffett are effectively telling the market that Berkshire is worth even more than its current valuation.
Abel's spending spree did not stop at buybacks. He also added $10 billion to Berkshire's stake in Alphabet, Google's parent company, and acquired Taylor Morrison Home for $6.8 billion, a deal that closed in the third quarter and was not part of the second-quarter filing. The moves represent a departure from Buffett's recent strategy of accumulating cash—about $380 billion in cash and short-term Treasuries—while waiting for the perfect investment opportunity. Buffett famously likened investing to a batter who can wait out an unlimited number of pitches until the right one comes along.
Beyond a brief announcement shortly after becoming CEO that Berkshire would resume repurchasing shares, Abel has not spoken publicly about his recent spending. The company has never shared details about how it calculates intrinsic value, only revealing what it buys and sells when legally required. In March, when CNBC reporters asked Abel why he thought Berkshire shares were undervalued, he said only that it was based on the economic prospects of the companies Berkshire owns some or all of. Most of those companies are performing well, according to the filing.
Abel's willingness to put his own money on the line extends beyond the buyback. He takes his salary in stock, a move that further aligns his interests with shareholders. That kind of personal risk-taking appears to be resonating with analysts. Several have switched their recommendation from «hold» to «buy» for Berkshire. And while some might have expected the share price to drop after Buffett stepped down, it is up for the year so far.
The leadership transition at Berkshire has been closely watched, given Buffett's legendary status as the «Oracle of Omaha» and his 187-year-old company's trillion-dollar valuation. Skepticism about Abel's ability to fill Buffett's shoes was widespread. By making a very public bet on himself and the company, Abel is demonstrating confidence not just in Berkshire's current value but in his own ability to grow its profits and worth. The message to the market is clear: if investors are not convinced, Berkshire will buy back its own stock.
That approach echoes a broader principle in leadership: people trust those who risk their own funds. When someone expresses confidence in their abilities by putting their own money on the line, others tend to believe they are right. For Abel, that dynamic appears to be playing out. The buyback, the Alphabet investment, and the Taylor Morrison acquisition all point to a CEO who is not waiting for the perfect pitch but is actively shaping Berkshire's next chapter.
As the company moves forward under new leadership, Abel's actions in his first months on the job suggest a strategy that combines Buffett's disciplined value investing with a willingness to deploy capital aggressively when opportunities arise. The coming quarters will show whether that bet pays off, but for now, Abel has made one thing clear: he is all in.
