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Apple (AAPL.US) and its suppliers fell after Berkshire Hathaway cut its stake.
AInvestMonday, Aug 5, 2024 4:20 am ET
1min read
AAPL --
BRK.A --
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After Berkshire Hathaway Inc. (BRK.A.US) "whipsawed" Apple Inc. (AAPL.US), shares of Apple suppliers fell on Monday. Shares of iPhone assembler Foxconn International Inc. and chip maker TSMC Corp. in Taiwan fell about 10% each, while shares of Murata Manufacturing Co., a Japanese supplier of components, fell 15% in Tokyo and LG Innotek Co. in Seoul rose 13%. Shares of Apple itself fell nearly 7% in pre-market trading.

"It's hard to argue that this isn't a negative for the market," said Mike O'Rourke, chief market strategist at JONestrading, in a note on Berkshire's sale of Apple shares.

Berkshire Hathaway disclosed in its Aug. 4 filing that it had reduced its stake in Apple from 789 million shares to about 400 million shares, a drop of nearly 50%, at the end of the second quarter. The large reduction in Apple shares was part of a $75.5 billion net stock sale in the second quarter that boosted Berkshire's cash reserves to a record $276.9 billion, up from $189 billion in the first quarter. The company repurchased only $345 million of stock in the second quarter, down from $2.6 billion in the first.

Berkshire's sale of Apple shares is notable because Warren Buffett, the company's chairman, had suggested at its annual meeting in May that if the U.S. government raised capital-gains taxes to help fund a rising federal deficit, selling "a little Apple" would be good for Berkshire's shareholders in the long run. But some analysts say the size of the sale suggests it may not be just about tax savings.

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