This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.independent.co.uk/news/business/news/warren-buffett-says-tesco-investment-was-a-huge-mistake-9770684.html
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Warren Buffett says Tesco investment was a 'huge mistake' | Warren Buffett says Tesco investment was a 'huge mistake' |
| (35 minutes later) | |
| Legendary investor Warren Buffett has admitted he made a “huge mistake” investing in Tesco, the troubled supermarket retailer with a £250 million black hole in its accounts. | Legendary investor Warren Buffett has admitted he made a “huge mistake” investing in Tesco, the troubled supermarket retailer with a £250 million black hole in its accounts. |
| The “sage of Omaha”, who is worth an estimated $67 billion (£41.5 billion), has built a 4.1 per cent stake in the company through his Berkshire Hathaway vehicle over the past seven years, making him Tesco’s third largest investor. | The “sage of Omaha”, who is worth an estimated $67 billion (£41.5 billion), has built a 4.1 per cent stake in the company through his Berkshire Hathaway vehicle over the past seven years, making him Tesco’s third largest investor. |
| However, competition from discount rivals like Aldi and Lidl and a series of mistakes by management have left Tesco in turmoil. | However, competition from discount rivals like Aldi and Lidl and a series of mistakes by management have left Tesco in turmoil. |
| Last week, it was forced to call in Deloitte to undertake a “comprehensive review” of its accounts after admitting that its first half profits will be £250 million lower than previously expected. | Last week, it was forced to call in Deloitte to undertake a “comprehensive review” of its accounts after admitting that its first half profits will be £250 million lower than previously expected. |
| The profit overstatement came to light after an internal whistleblower alerted executives about irregularities in the way in which the company accounted for deals with suppliers. Tesco’s new chief executive Dave Lewis has suspended four executives in the wake of the admission, including its UK managing director, Chris Bush. | The profit overstatement came to light after an internal whistleblower alerted executives about irregularities in the way in which the company accounted for deals with suppliers. Tesco’s new chief executive Dave Lewis has suspended four executives in the wake of the admission, including its UK managing director, Chris Bush. |
| With Tesco shares having halved this year, 84-year-old Buffett told CNBC: “I made a mistake on Tesco. That was a huge mistake by me.” | |
| Buffett’s comments come just days after Britain’s highest profile stock-picker Neil Woodford warned it could be years before he again dared to sink cash into Tesco giant or its major rivals. The £7 billion fund manager — who sold his stake in Tesco in the wake of the grocer’s first seismic profit warning in early 2012 | Buffett’s comments come just days after Britain’s highest profile stock-picker Neil Woodford warned it could be years before he again dared to sink cash into Tesco giant or its major rivals. The £7 billion fund manager — who sold his stake in Tesco in the wake of the grocer’s first seismic profit warning in early 2012 |
| He said: “The industry, in my view, faces a long road to exit this period of depressed margins and crushed profitability — and maybe asset bases and balance sheets have to be rebalanced, before the industry can re-emerge as an investable proposition. The immediate future is going to be very tough for the sector but particularly for Tesco.” | He said: “The industry, in my view, faces a long road to exit this period of depressed margins and crushed profitability — and maybe asset bases and balance sheets have to be rebalanced, before the industry can re-emerge as an investable proposition. The immediate future is going to be very tough for the sector but particularly for Tesco.” |