The coronavirus pandemic has been described by financial experts as a black swan or a surprising event that ends up having major effects. These effects have largely been negative especially as the world’s economy continues to take hits as countries scramble to find solutions to the viral outbreak. The unexpected event seemingly has one positive outcome for one particular person though– billionaire investor Warren Buffett.
Decimated Values
After the United States’ largest public companies saw huge declines in their market capitalizations due to fears about the coronavirus, Buffett can now reportedly afford to buy any of these big names. Well, that is if he wants to.
According to sources, the businessman’s holdings company Berkshire Hathaway is currently sitting on a whopping $125 billion reserve of cash and U.S. Treasury investments. Looking at current figures and disregarding other circumstances, the investing whiz can have his pick of any of the 450 companies listed in the S&P 500 and over 80 in the Nasdaq.
Buffett has just about enough resources on hand to buy PayPal (valued at $118 billion) and even global fast-food giant McDonald’s (valued at $125 billion). He could also snag fellow billionaire Elon Musk’s automaker company Tesla (valued at $97 billion) without breaking the bank at all.
Cash Reserve Plans
While all of these are interesting thoughts to mull over, it’s unlikely that Buffett would spend the cash reserve to completely buy out a large public company. As he promised in a letter to his shareholders, at least $20 billion would always be on hold and considered untouchable as a way to protect the company from ‘external calamities’. That said, some sources still crunched the numbers to see which remaining companies Buffett could afford through Berkshire Hathaway untouchable cash portion considered. As it turns out, the 89-year-old billionaire can still buy such names as General Motors (at $32 billion), Target (at $48 billion) and General Electric (at $71 billion).
Quest for an ‘Elephant-Sized Acquisition’
While Buffett is yet to make his move, he’s previously said that he is on the for an ‘elephant-sized acquisition’. When he made the statement, the billionaire reportedly had one problem: prices were too high. His choices have certainly multiplied given the recent turn of events. He intends to spend his company’s excess liquidity on business that it can permanently own.
