One of the biggest losers 'on paper' from the sharp fall in the share price of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) in the past few days is US billionaire Warren Buffett, who holds a position in the Israeli pharmaceutical company through his investment company Berkshire Hathaway.
Berkshire Hathaway's financial report at the end of the first quarter of 2019 reveals that Buffett's company held 43 million Teva shares, unchanged from previous quarters, but worth $283 million less than at the end of 2018. The value of Buffett's Teva holdings is now worth just $495 million.
Buffett first invested in Teva in the fourth quarter of 2017, when the average price of Teva shares was $15, although it is not known exactly at what price the shares were purchased and it was possible that Berkshire Hathaway bought the stock when it was at its lowest point - similar to the current price. Buffett then increased his Teva stake during the first and second quarters of 2018 when Teva's shares were being traded in the $18.5 - 19.5 price range.
In total, Berkshire Hathaway invested hundreds of millions of dollars in building up its position in Teva. At this stage, with Teva's share price at $11.44, it is not looking like a very successful investment.
Teva's share price has been falling sharply since the start of the week - about 20% - on the Tel Aviv Stock Exchange and New York Stock Exchange after 44 states in the US filed suits against 20 generic pharmaceutical companies including Teva on allegations of price fixing. Estimates are that Teva will be required to pay a $3 billion fine.
Published by Globes, Israel business news - en.globes.co.il - on May 16, 2019
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