What a Difference Buffett Makes

On Monday morning, Warren Buffett’s Berkshire Hathaway (BRKA) announced that it acquired a 10% stake in STORE Capital (STOR), a triple-net REIT with more than $4 bn market cap.

The market’s reaction:

Source: Bloomberg

The stock opened almost 9% higher on record volume and closed the day +11.42% higher than Friday’s close. What a difference Buffett can make!

The interesting point in the story is that Berkshire bought the stake in a private placement at a 2.50% discount (at 20.25 USD a piece, according to MarketWatch).

The news:

Store Capital enjoys biggest one-day boost after Warren Buffett buys stake

Buffett’s Bet on Store Capital Shows Not All Retail Real Estate Is Equal

Berkshire bulks up in real estate with Store Capital stake

And the long-term chart:

Source: Bloomberg

The stock is in a 1 year downtrend, with this jump just below its trendline. This jump barely had an impact on VNQ or IYR, the stock’s share in these ETFs is relatively small, around 0,40%.

 

Disclosure: We are long VNQ and IYR.