Warren Buffett's cash mountain is bigger than Disney after its epic stock plunge
- Warren Buffett's $147 billion cash pile is worth more than Disney's entire market value.
- Berkshire Hathaway has boosted its reserves, while Disney stock has plunged 60% from its peak.
Warren Buffett's cash mountain is worth more than the entire value of Disney, reflecting the investor's financial prudence and the dramatic decline in the media behemoth's stock price.
Buffett's Berkshire Hathaway held a near-record $147.4 billion in cash, Treasury bills, and other liquid assets at the end of June, its second-quarter earnings showed.
Disney shares sunk to their lowest level in nine years on Thursday, dragging the company's market capitalization to just below $147 billion in early trading.
Berkshire's cash pile ballooned by about 40%, or $42 billion, in the 12 months to June 30, partly because Buffett and his team sold a net $29 billion of stocks in that period, an Insider analysis shows.
Moreover, they only spent about $10 billion on stock buybacks in the same timeframe, compared to outlays of $27 billion in 2021 and $25 billion in 2020.
Buffett is a value investor who excels at sniffing out underpriced stocks and businesses, and buying them at discounted prices.
Berkshire's growing cash reserves likely indicate he's struggling to find bargains — or at least more compelling assets to hold than Treasurys.
The Berkshire CEO has also pledged not to deplete the company's cash pile below $30 billion, as he wants the conglomerate to remain a "financial Fort Knox" that can weather virtually any catastrophe.
Moreover, having ample cash on hand enables him to pounce during periods of panic. Berkshire made lucrative investments in Goldman Sachs, General Electric, and other companies at the height of the 2008 financial crisis.
As for Disney, its stock has fallen 60% from its March 2021 peak, wiping more than $200 billion off its market value. Its business spans movies, TV shows, theme parks, hotels, cruises, cable channels, retail stores, and streaming. The company was hit hard by business closures, travel restrictions, and disruptions to supply chains and content production during the pandemic.
Disney is also locked in a long-running legal and political battle with Florida governor Ron DeSantis that's alienated some customers. There's also been significant management turnover in recent years, with Bob Iger stepping down as CEO in 2020 only to return last year, and concerns about a slowdown in subscriber growth at its Disney+ streaming service.
The result of Buffett loading up on dry powder, and Disney's stock tumbling due to its recent troubles, is that Berkshire's cash pile — assuming it hasn't shrunk significantly since June — is worth more than one of the world's most famous companies.