- Warren Buffett is monitoring some of the businesses being hammered by the novel coronavirus, The Wall Street Journal reported on Tuesday.
- The billionaire investor is “circling the hardest-hit companies in the travel, lodging and entertainment sectors,” sources told the newspaper.
- Airlines, hotels, casinos, cinemas, and other businesses are suffering as people stay at home and authorities shut nonessential businesses to slow the pandemic’s spread.
- Buffett could deploy his Berkshire Hathaway conglomerate’s $128 billion cash pile by investing in them or loaning them money.
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Warren Buffett is eyeing some of the businesses suffering the most from the novel coronavirus, The Wall Street Journal reported on Tuesday.
The billionaire investor and Berkshire Hathaway boss is “circling the hardest-hit companies in the travel, lodging, and entertainment sectors, eager to offer financial lifelines should they be needed,” the newspaper said, citing people familiar with the matter.
Airlines, hotels, casinos, cinemas, and other businesses in the travel and leisure space are running short of cash as people stay at home to slow the pandemic’s spread and authorities shut down tourism hot spots such as the Las Vegas Strip. Buffett may be happy to offer a helping hand — at a price.
Armed with Berkshire’s $128 billion cash pile, Buffett has been hunting for an “elephant-sized acquisition” for a few years now. Following the worst quarter for US equities since the 2008 financial crisis, he may finally find one at a valuation he can stomach.
Buffett could also deploy cash as a loan. For example, he struck a $576 million financing deal with Lee Enterprises as part of the sale of Berkshire’s newspapers to the publisher in January.
The Berkshire Hathaway chairman and CEO has his pick of distressed companies. He could help the airlines, raising his stakes in American, United, Delta, or Southwest on the cheap. Carnival, Norwegian, and Royal Caribbean might also welcome Buffett’s cash, as the cruise lines’ offshore registrations may mean they’re ineligible for a US government bailout.
Hotel chains such as Marriott and Hilton, casino groups such as Caesars Entertainment, cinema chains including Cinemark and AMC Theatres, and theme-park operators such as Six Flags and SeaWorld could also fit the bill.
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