Warren Buffett, the Oracle of Omaha, has placed his bet on the likely company to come out of the on-demand video streaming wars. In a filing to the Securities and Exchange Commission, it was revealed that Buffett's company, Berkshire Hathaway, had purchased around $2.6 billion worth of Class B shares in Paramount Global.
Buffett's company bought around 69 million shares of Paramount Global during the first quarter. According to its SEC Form 13F filing, the company also bought significant shares in other companies. Berkshire purchased 2 million General Motors GM shares, bringing its total number of GM shares to 62 million. During the first three months of 2022, the investment company purchased a total of $51 billion in shares. Its cash pile decreased to $106 billion from $147 billion due to its stock acquisitions.
In addition to the new investments, Berkshire sold over $10 billion worth of shares, including its shares in supermarket Kroger and Verizon Communications and medical companies Abbvie and Bristol Myers Squibb.
Paramount Global owns CBS, MTV, Nickelodeon, Showtime, and Comedy Central. It also runs the Paramount+ streaming service. To raise funds, Paramount has been selling assets such as CBS Studio Center, Black Rock, and CNET. It agreed to sell Simon & Schuster to Bertelsmann's Penguin Random House last year, despite the DOJ filing a lawsuit to block the transaction.
Berkshire Hathaway's purchase of Paramount stock instantly makes Buffett one of the company's largest outside shareholders, alongside GAMCO founder Mario Gabelli. National Amusements, which Shari Redstone and the Redstone family own, controls Paramount.
Aside from Paramount, Buffett is a large shareholder in a handful of other streaming companies, including Apple, which has ridden its Apple TV+ service to critical praise. Buffett also has investments in Amazon, which has adopted a similar business model with its Amazon Prime Video service. Berkshire holds a stake in Charter Communications, which is developing a streaming platform alongside Comcast.
Buffett is renowned for buying stock in companies that he feels will outperform the market over time, which is a positive indicator for Paramount. Buffett, through Berkshire, also owns stock in more than 90 companies, including railroad, utilities, insurance, retail, and manufacturing companies.
Across the entertainment industry, investors have become wary of the video streaming stocks, particularly after Netflix's stock decline following dismal quarterly earnings figures. Buffet's announcement comes ahead of Paramount Global's annual upfront pitch to television advertising buyers in New York, which is scheduled to take place this Wednesday.