Warren Buffett Sells All US Airline Holdings

Right Side of The Trade Daily

May 3, 2020

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Billionaire investor and Berkshire Hathaway CEO has liquidated all of his US airline holdings.

His company, Berkshire Hathaway has sold off their 11% stake in Delta Air Lines (DAL:NYSE), 10% stake of American Airlines (AAL:NASDAQ), 9% stake of United Airlines (UAL:NASDAQ) and 10% stake in Southwest Airlines (LUV:NYSE).

This will undoubtedly move these stock prices come Monday, May 4, 2020. Likely not in the direction investors want.

Warren sees more downside to airline companies by the way of excessive cash burn, limited revenues, travel bans, incurring debts and fear of flying from retail. As well, US airlines are required by US government to pay back any cancelled flights due to the pandemic.

In the past, Warren has leveraged his position and company Berkshire Hathaway, as a potential loaner or bail-out prospect to cash-starved bluechip companies. They have loaned billions of dollars by way of higher interest loans and future discounted stock warrants agreements.

Could Warren be possibly planning his next stranglehold on discouraged airline companies? Maybe you should be buying Air Canada (AC.TO) instead. Read my previous post regarding Air Canada stock.

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