Berkshire Hathaway Portfolio Investment, StoneCo Ltd., Up 12% on Takeover Talks

11AugAugust 11, 2020

Berkshire Hathaway Portfolio Investment, StoneCo Ltd., Up 12% on Takeover Talks

StoneCo Ltd. (STNE), a financial technology company in Brazil, is up 12% at $52.85 on takeover talks with Linx S.A. (LINX) a Brazilian software firm. It is now 120% above the IPO price of $24 paid by Todd Combs of Berkshire Hathaway in October, 2018.

Q2 2020 hedge fund letters, conferences and more

StoneCo Ltd. is a financial technology company based in Brazil, the fourth-largest payment processor by volume in that country. Brazil is the fourth-largest market for non-cash transaction volumes in the world, which gives the company a lot of scope for growth. Todd Combs of Berkshire Hathaway invested $340 million in the company’s initial public offering, buying about 11 percent of the company. This stake is now valued at about $700 million. Berkshire had not previously invested in an IPO in decades.

Article by Dr. David Kass

Author

Dr. David Kass

David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: [email protected] (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.