Berkshire Hathaway stock market turmoil after Warren Buffett's retirement announcement
Berkshire Hathaway shares have seen a sharp decline of more than 10% since May 3, a move that coincides with Warren Buffett announcing his plans to step down as CEO at the end of the year. Meanwhile, the S&P 500 has maintained positive growth over the same period.
The market is seeing the “Buffett taste” — the outsized valuation of the investing legend’s leadership — lose steam, with investors worried that Berkshire’s performance will no longer be as strong as it once was.
The Class A luxury stocks index hit a new high on May 2. But it has since fallen about 10%. Some experts say the correction is likely to last longer in the near future.
Cryptocurrency and the influence of veteran Buffett
In this context, the value of Berkshire Hathaway shares has been affected to some extent. Market analysts believe that the "evaporation" of "Buffett advantage" is the main reason why the stock is facing selling pressure.
Berkshire's valuation, measured by P/B (the value of the company's assets compared to the market price), has fallen from 1.8 times to 1.6 times, close to its historical average of about 1.5 times. This shows that the market is reacting appropriately based on the company's intrinsic foundation and future earnings prospects.
Berkshire’s operating profit fell 14% to $9.64 billion in the first quarter of 2025—especially amid struggles in its insurance, energy, and railroad sectors. Experts predict that the move reflects investor caution about the transition of power.
Market Value and Trust Framework
At its peak in May, Berkshire Hathaway was trading at a P/B of around 1.8. However, the ratio has now fallen to 1.6, close to its long-term average of 1.5. Many investors see this as a positive sign that the market is preparing for a natural bottom in this correction.
Meanwhile, some analysts have stressed that the initial market reaction was largely an algorithmic reaction to the leadership transition news, but that subsequent declines were driven by internal factors within the company and actual earnings trends.
Berkshire Hathaway remains at a market cap of more than $1 trillion, and analysts are closely watching how the company adapts under new CEO Abel and whether it can maintain or enhance shareholder value in the new era.
Abel's succession plan and vision
Greg Abel, a trusted successor, has been with Warren Buffett since the early days. He joined Berkshire Hathaway in 1999 after establishing himself as a key player at MidAmerican, where he served as chairman.
In 2008, Abel became CEO of MidAmerican Energy, the predecessor of Berkshire Hathaway Energy. Shareholders expect Abel to maintain a long-term investment spirit and decentralized management, ensuring the stability of the business in the future.
In addition to investment strategy, they also want Abel to expand opportunities to exploit new technologies, thereby improving competitive position. Warren Buffett affirmed that the leadership transition plan is to maintain sustainability, rather than fundamentally change Berkshire Hathaway's core investment strategy.
Source: https://tintucbitcoin.com/gia-co-berkshire-tut-hai-chu-so/
Thank you for reading this article!
Please Like, Comment and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
