How Warren Buffett’s Berkshire Hathaway came to own 20% of American Express

American Express (AXP), one of the world’s top credit card companies, has also long been a favorite of Berkshire Hathaway (BRK-A, BRK-B) CEO Warren Buffett.

“You can’t create another American Express,” Buffett told Bloomberg in December. “I could create another shoe store. I could create another business publication. I could do all kinds of things with hundreds of billions of dollars. But I can’t put in the minds of people what is in their minds about American Express.”

As of September 29, 2022, Berkshire held 151,610,700 AmEx shares, or 20.29% of the total. At the end of 2021, AmEx was Berkshire’s largest securities holding by weight and third-largest holding by market cap, with its stake valued at $24.8 billion — which grew to $26.1 billion by September 29, 2022.

In 2022, Berkshire built a stake of at least 20.2% of Occidental Petrleum (OXY) and obtained regulatory approval to buy up to 50% of the oil giant’s common stock. So while AmEx may no longer be Berkshire’s largest holding by weight, the company’s value to Berkshire is clear.

“It’s sort of like a Good Housekeeping seal of approval,” American Express CEO Stephen Squeri told Yahoo Finance recently. “Warren and Berkshire are iconic investors, and to have him speak about the brand and speak about the company, and to speak about the direction that we’re going so enthusiastically [is important].”

In 2020, when the pandemic hit, AmEx stock declined to as low as $66 as lockdowns and travel bans dragged down profits by…

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