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Warren Buffett: ‘Tesco was a huge mistake’ Warren Buffett: ‘Tesco was a huge mistake’
(about 1 hour later)
Legendary investor Warren Buffett has admitted he made a “huge mistake” by investing in Tesco, as the woes mount at Britain’s largest retailer. Legendary investor Warren Buffett has said he made a “huge mistake” by investing in Tesco, as the problems mount at Britain’s largest retailer.
Tesco shares have slumped 45% this year as the grocer issued a series of shock profit warnings and was last week embroiled in an inflated profits scandal, making it the worst performer on the FTSE 100 index. Tesco shares have slumped 45% this year as the grocer has issued a series of shock profit warnings and last week became embroiled in an accounting scandal, admitting it had overstated its profits by £250m. The retailer has been the worst performer in the FTSE 100 index this year.
Buffett, known as the sage of Omaha and one of the world’s richest people, remains Tesco’s third-largest shareholder through his Berkshire Hathaway venture with a 4.1% stake, but has seen the value of his investment fall by around $750m (£465m) this year. Buffett first bought into Tesco in 2006 and steadily increased his holding. Undaunted by the company’s first profit warning in 20 years, he raised his stake in January to over 5%, when others were selling the stock. Tesco was the only stock in his top 15 picks that recorded a loss last year. Buffett, known as the Sage of Omaha and one of the world’s richest people, is Tesco’s third-largest shareholder, with a 4.1% stake, through his Berkshire Hathaway investment business. However, the value of Buffett’s stake has fallen by around $750m (£465m) this year.
Buffett first bought into Tesco in 2006 and steadily increased his holding. Undaunted by the company’s first profit warning in 20 years, he raised his stake in January to over 5%, when others were selling the stock. Tesco was the only stock in his top 15 picks that recorded a loss last year.
Buffett told CNBC: “I made a mistake on Tesco. That was a huge mistake by me.”Buffett told CNBC: “I made a mistake on Tesco. That was a huge mistake by me.”
The UK’s top financial regulator has launched a full-scale investigation into the £250m accounting scandal that plunged Tesco even deeper into crisis. Tesco’s new boss Dave Lewis is tasked with restoring Tesco’s battered reputation as well as fixing its business after a worsening sales performance. The UK’s top financial regulator has launched a full-scale investigation into the accounting scandal that has plunged Tesco even deeper into crisis. Tesco’s new boss Dave Lewis is tasked with restoring Tesco’s battered reputation as well as fixing its business amid rapidly declining sales.
Meanwhile, star UK fund manager Neil Woodford said last week it could be a long time before any of the British supermarkets became investable companies again. Meanwhile, star UK fund manager Neil Woodford said last week it could be a long time before any of the British supermarkets became good investment prospects again.
Elsewhere in the grocery sector, Sainsbury’s shares fell again on Thursday, trading down 1.4% at 230.7p, after its new boss revealed a slump in sales and warned that Britain’s supermarkets are facing a ‘perfect storm’ of problems. Elsewhere in the grocery sector, Sainsbury’s shares fell again on Thursday, trading down nearly 4% at 224.8p, after its new boss revealed a slump in sales and warned that Britain’s supermarkets are facing a ‘perfect storm’ of problems.