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All right, we got to Scarlet Foot Paul Sweeney live here in our Bloomberg Interactive Broker Studio or streaming live on YouTube and at Bloomberg dot com. Buffett goes out like a bear with five billion dollars in Q four sales. That's according to the thirteen f's Matthew Palizola Joints is here senior alys who covers the insurance companies, including Berkshire Hathaway for Bloomberg Intelligence. He's covered that company for decades.
Here was this the last quarter where Warren Buffett was actively managing maybe I guess the account along with his co managers there. So this is maybe the last time we can say Warren Buffett sold this or bought this.
Yes it is.
So he was the CEO as of the fourth quarter. So these moves that were looking at in the thirteen F took place in the fourth quarter. Of last year. To be totally fair, he's been stepping back. He probably wasn't behind a lot of this anyway, but this is actually the last quarter that you could even attribute these things to him. He remains chairman, so you never know he'd be looming behind the scenes, but his last quarter is CEO.
And the thing about his husband in Apple was that he famously said he was only investing in things that he understood in that typically did not include technology companies. But Apple, I guess he saw more as a consumer company than anything else.
Yeah, I think so.
And I think the you know, his thing was motes, right and probably still is, but the iPhone mote and the infrastructure built in I think those were appealing things. They have been pairing that that investment, as we know, part of that, and you know, it's it's kind of a twist because he had said this said of the annual meeting a couple of meetings ago, that it was a kind of tax reasons that they had these huge unrealized gains in there, and he thought taxes.
Would be going up.
Now they're certainly not going to go up under the current administration kind of anytime soon. But Buffett is always long term thinking, so I think that's what he was looking at as we've got, you know, tens of billions
of dollars of unrealized gains that will be taxed. And I think it does still hold true that in ten years from now, probably the corporate tax rate could be higher, and I think that was his concern and part of the reason they were taking down those those big gains in those big positions.
The Conglomberate also cut its Amazon steak by seventy five percent.
They so Amazon. They initially got into Amazon him in twenty nineteen. That was one of his investment deputies, I think brought it to him. Then again also like tech, but a retailer. Right that position we calculated was up about one hundred and thirty to one hundred and forty percent over the time. They hold it nice but kind of in line with the S and P five hundred, So it didn't really outperform. So I think it was kind of taking some money off the table.
I sold.
I believe like one point seven billion worth of that stock cut, cutting most of the position, so that one I think was probably a company specific didn't really outperform. They bought four billion of Alphabet last quarter, so you know, the kind of tech aversion you know may be changing over time.
What did he increase takes in?
So two big ones, Chevron and Chubb. So Chevron is they their fifth biggest holding. I think they interestingly, I don't know if they were kind of betting on US intervention in Venezuela, which happened kind of after the quarter, so you can't say that like murderer got taken out and this stuff happened, and they did it and reaction they did it before. But maybe they were reading the tea leaves there. I don't know. It's a big holding for them. I think the the kind of geopolitical energy
play makes total sense. The other one is Chubb, which you know, I don't want to get too excited thinking about insurance mega deal here, but they are now the second well they've been the second largest holder of Chub stock.
Chub makes total sense.
It is, in our view, BI a cream of the crop insurance company, Global reach, still growing nicely, great management.
It's a company that Berkshire would want to own.
Now Berkshire's got their own massive insurance business.
Yes.
The interesting thing is you've got two massive insurance businesses.
They're actually quite.
Complimentary if one were to want to put them together. So the Berkshire business very big personal atto in Geico, very big reinsurance, kind of global global reinsurance. Those are two businesses that Chubb is not really in. There's some overlap in the kind of US specialty businesses that they're both in, but it would be phenomenally complementary of those two businesses. I think there's probably a lot of hurdles to some sort of you know, total deal there Chubb's
Chubb's market cap is one hundred thirty billion. Berkshire has three hundred billion of cash, so they theoretically could buy Chubb in cash if they wanted to. But I think it's probably some cultural issues and would Shubb really want to sell as the other thing? But you know, it is something as a stock something Berkshire would want on.
Is that a strategy that Berkshire actually follows through on where it starts off with a steak and then eventually decides, you know what, we're just going to buy.
The whole thing.
Scarlett, Yeah, they do do that.
So I think with Burlington Northern, which is a little bit before time when they bought it. They did things like that where they acquire the public steak and then they build it over time. That's why there was a lot of speculation about occidental. Buffett then came out and threw cold water on it, saying that, but it seemed like it was going along with their playbook of huge acquisitions that they made before.
So now that warns out, can we have a serious discussion about a dividend?
We can? I think, you know, we'll get you on the phone, grig Able. Let's see what he says.
You know, I think our take has been in the early years. Able will probably adhere to the ethel of Berkshire. And I don't think he's going to come in and start breaking down walls. I don't think anyone would like to see that, especially Buffet's still there. I mean, they have tremendous excess capital. Buffett is praised Able as being a great capital allocator, great capital manager, and they've also said we literally can't there's so much money, we can't put it to work in a reasonable way. So it
would make sense to see something happen there. And I think, look, the other thesis is they're not going to be as good as anything anymore. Right, there's no better investor than Buffett.
Give a g.
Jayne, who is the head of the insurance operations. He's been selling a lot of stock. Perhaps he's getting close to retirement, so not going to be good at any of these things anymore. Some sort of capital which are gonna be a big catalyst.
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Apple's correlation to the Nasdaq one hundred in next has tumbled to zero point two to one, it's lowest since two thousand and six, as the company's decision to mostly sit out the AI arms race has turned it into an outlier. Ryan of Lastelka, he's an equities reporter for Bloomberg NewCity Space out there in Chicago. Ryan, is this a good thing for Apple? A bad thing? Because historically it's been like, Hey, Apple, when are you guys going
to get on this AI bandwagon? And then maybe now it's kind of working out to their benefit that they're not so much on that.
Yeah, So in this market, obviously, there has been a lot of AI related volatility. There's been a lot of concern about the amount of money that big tech companies are spending on AI, but Apple isn't really spending on AI in that way. There's been a lot of concern
about AI disrupting software companies. Apple isn't really software. There's a lot of concerns about AI disrupting all parts of the market, whether it's financial services, legal services, data, all these kinds of things, none of which really involve Apple.
But at the same time, Apple is probably going to be the major way that people access AI services on their phones, on their computers, on their tablets, so on, and so forth, which means it has a certain amount of upside potential related to the technology without having to spend on it the way companies like Microsoft or Alphabet or Meta are. So it's kind of perfectly positioned in this current environment when there's concern about both AI spending but also AI disruption.
So it kind of worked out that Apple hasn't made very much progress on AI, but on overall, the fact that it didn't do a lot on AI was kind of falling behind. In fact, losing talent was something that was a drag on the stock, say a year ago.
Yeah, people were concerned about this. But a few weeks ago it announced a multi year partnership with Alphabet, where Google is going to be providing the technology behind Apple's AI, including Siri. That was seen as a way for the people to feel really relieved that they are going to be involved with a I have some kind of offering from a highly respected, you know, AI lab model provider in Alphabet without having to you know, pay for it or have developed their own in house stuff, which is
obviously an area of huge competition, heavy expenses. I think the four major spenders this year are spending six hundred and fifty billions, so they are stepping out of that and they don't have to worry about that.
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What the big gainers today and it happened even before the market open. Paul is MSG s MSG Sports. It is the owner of the Knicks and the Rangers, not the owner of MSG Networks because that's another business. Yes, so there's a whole bunch of businesses within MSG. I mean it's difficult to follow.
Yeah, and after they sold their cable business years ago, so now they just focus on their entertainment.
And then there's Sphere Entertainment, which is the big spere in Las Vegas. Awesome, So all of James Dolan's media properties and assets in this suite of publicly traded companies.
Let's bring in Randall Williams.
He is our business of sports reporter here at Bloomberg and Randall, you have been following this story about this potential split of the New York Knicks and the New York Rangers within MSG Sports. This is something that a lot of people have been calling for for a long time.
Yeah.
You look at the enterprise value of the Knicks and Rangers and what they're traded at its seven billion dollars. But you look at what the Lakers sold for a loan ten billion dollars, and I think the Knicks obviously are in a larger market than New York. The Lakers have won more titles, but New York is New York, and so both the Knicks and the Rangers I think would carry a tremendous value, maybe twelve billion dollars combined, and that's on the low end.
So is this maybe a first step for selling one of the teams? Selling a piece of one of them?
Get to speculatative territory with James Dolan, that's always a fun place. Look, I mean Silver Lake owns a piece of MSG Sports, so that's five percent. It's a ten percent stake, but probably five percent each. And when you think about someone wanting to buy into that, you would want to know how much each individually is worth. If not, you're buying into something and it's like you could be buying in at a supreme price or maybe something that's
a little bit lower. And I think buyers who are interested in there have been several over the years, want want a more precise price, and so do the shareholders of MSG Sports.
So what's held up the company from being split up up until now because there's been a lot of calls for the enterprise value trading at a discount to the actual value of each franchise has been there for a while.
I know the answer for voting stock is from the Dolan control.
Yeah, I think that James Dolan has long been the controlling person for all of these companies. He decides where for worse, yes, exactly, he decides, you know what he wants to do. And there is a board of directors that voted on this. But this would have never been up been up for a vote had James Dolan and said, you know what, maybe we should consider this, and then from there on, you know, things happen.
And then they vote on this. Madison Square Garden, James Stone, did they own the garden itself? The building? I believe so, yeah, because that's always a big that's always a big part of it too. Do you own the arena they plan or.
Yes, a different publicly traded company. Exactly, the exactly.
And I had a Bloomberg terminal reader and the original copy that I wrote this morning. I said Madison Square Garden was one of the most famous in the world, and someone quickly, someone quickly replied and said, no, it is the most famous arena in the world. So Madison Square Garden is a huge you know, attraction. When you
think about arenas in New York. There's the Barclay Center, of course, which is newer, but the legacy of New York is often rooted in MSG and the events that it's held over many many years.
Yeah, I mean, first of all, and they also put in I think close to a billion dollars in renov several years ago, so they've really upgraded the garden. What's one of the many great things about going to the garden is they have the photos on the wall, the concourses, all the great events, whether it's a concert, a game, whatever, and there's thousands of them.
There's no there's no venue that has a greater history, I would argue than Madison Square Garden that is still you know, open and operational. And that's that's part of this. I mean, you think about the Knicks playoff end last year. You think about the Rangers and what they've done not the past coming the past two seasons, but in the seasons before that, all of these things. When they eventually win,
you know, God willing, it isn't MSG. It isn't one of the deals where you know they're in away game and then they have to come back. If it happens in MSG that will probably be the biggest moment in that arena in the last twenty five years, and so whoever wants to buy into that potentially is going to want a good value at it.
There is also a note from light Shed that pointed out that there's a new tax law that goes into effect for the twenty twenty eight fiscal year that were public companies limits deductions on one million dollars two one million dollars per covered employees.
For sports teams, it's easy.
To find a lot of employees that make at least a million dollars a year. So once this goes through in twenty twenty eight, that's going to put the company in a negative free cash flow situation unless the Knicks, for instance, go deep into a playoff run or the Rangers go deep into a playoff run. So it also allows the company, you know, for tax reasons, to be in a better position.
Absolutely absolutely.
I mean there's not a lot of publicly traded sports companies out there for this reason in particular, and you think about all of the big ones. You think about the Cranky Sports and Entertainment which houses the Rams, the Nuggets, I believe another soccer team and so many more. It's private, and that's that's for a reason. But this one is unique, and Madison's Square Garden is Madison Square Garden. The Knicks to the Knicks and the Rangers of the Rangers.
Another big trade that a lot of people are thinking about in professional sports is in the NFL with the Seattle Seahawks. Yes, what's the status to that? Because that the NFL teams don't come along very often.
Sure, so, the NFL's finance committee has been talking about this for over a year, and I think things just are at a point now where the ownership group in Seattle, the trust of Paul Allen, the former co founder of Microsoft, is at a point where they're ready to sell.
Hired some lawyers, right they have.
That's reported by SBJ. I don't believe the paperwork is signed just yet, but I trust beneficher, and you know, I think that that will happen later this year, whether that's at the NFL league meetings and Phoenix around the end of March and April, and then I think NFL owners would like to have a new owner by the time the new season starts.
How much of a stake do they own in the Seahawks. I mean, is this, you know, like super stake or is it.
Just you know, it's a control stake in the team.
And that wouldn't have happened in you know, since the Commanders are sold for six billion dollars. So whoever buys the Seahawks shots? Yeah, exactly.
And is it any sense whether it's going to be a billionaire financing group?
Look, there's so many The.
NFL's finance structure sees that a controlling owner has to have thirty percent of a team upfront. So it is in a situation where you know, you can take on some debt, but not a lot and thirty percent.
I would imagine.
I said this earlier, I think the Seahawks will trade for at minimum eight billion dollars. Thirty percent of that is going to be around two and a half in cash. There's not a lot of people who are willing to just write a two and a half billion dollar check in cash and then raise the money around it, because it isn't just raising the money, it's communicating to those
people that you're trying to bring in your ownership group. Today, I run this, but you're welcome to come on board the ship, so long as you understand that you're not the captain. And that's tough for a lot of people. Josh Harris did it, but he did it without private equity. Private equity is an option now. And so whoever buys this, whether it be you know, Jeff Bezos or whoever who Jeff Bezos considered buying the commanders, is going to have to write they have to check.
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Let's talk a little technology here. I got the SMP. I mean I get the Nasdaq, which is where you find a lot of the tech names. It's up one point four percent today, so that's a nice move. And there's always news in the text sector, which is why we have to chat with men deep Singing and on around run and all the folks at Bloomberg Intelligence to cover the tech space. So often. Meta platforms agreed to deploy millions of Nvidia processes over the next few years. Mandy,
what does this mean? Is it new? What's going on here?
Well, I mean it's not really new because Meta is among the top two customers for Invidia chips. So it's more to do with the fact that not only are they using the GPUs from Nvidia, they're also using the CPUs now and Intel and MD used to own that market off server CPUs, and what Nvidia is saying is give you a better throughput, a better performance if you
end up using our GPU cluster complement CPUs. And I think overall, I mean that's Meta's way of making sure they get the supply from Nvidia, because we heard that at least ten times from Jensen this year. The demand is really strong, and you know, they get to decide who they allocate their chips to. So this is one way that Meta is making sure they have the upline.
Yeah, all makes a lot of sense.
So again the hyperscalers spending more and you know, striking up new deals. Let's talk a little bit about uber It's planning to spend more than one hundred million to really supercharges robotaxi charging stations. How do you think about whether This changes the profile of what Uber is as a company.
I think for Uber, given the scale of their rides, you know, they do over thirteen billion rides a year. Compare that to a Weveimo that just did twenty million rides year.
I mean, let's go back, yeah, sales numbers again.
Thirteen billion rides for Uber and just to put it in context, that equates to maybe ten million rides a day and Vemo day twenty million rides in the whole year the past twelve months, which was phenomenal growth, you know, compare for them. But that's the scale that Uber is operating at, and that's their pitch that you know, if you've got two robot taxi players, they will eventually have
to tap our network. If you've got five players, then there's all the more reason to use Uber as the network to deploy your robot taxi fleet, because the hard part in this business is managing the way times. You can have a fleet of Wemo cars, but people don't have the patience to wait for ten minutes, you know, for a Vemo. So that's the scale of which Uber operates. It allows them to keep the ETAs really low, which is why people use these services.
And that's I think we're giving very dimensions of my lifetime the home ride sharing thing. Think about how it's changed your life, I.
Know, I mean back in the day, what did you have to do?
Right?
Yeah, and you know we have with our kids, we have this thing. You know, don't drink and drive. Don't drink and dry. Feel like nobody drinks.
Yeah, no, I know they look at you like you're crazy, because there's a solution for that.
Yeah.
Actually the people who drink and drive are full grown adults. Yes, yes, that's who does that. It's gen X.
Yeah.
And you can actually get parking on college campuses now and that was a huge problem with Duke. You can never get parking space. Now they're like, yeah, we got parking all over the place because the kids are ubering everywhere. Absolutely so uber technology.
What's it?
Are they fully globally penetrated right now? Or is there some big part of the world where like China, where they're just not a player.
Yeah, they're not a player in China. And the big tread is what the Chinese autonomous driving companies are trying to do is they're trying to roll out their fleet not only in China, but outside in Europe as well, And that's the next leg of the competition is if you've got you know, Chinese companies that are in robotaxis that don't end up using Uber and you know, we know dd is a big right sharing company that's a similar size Tuber.
So that's the thread.
But so far, I mean, outside of except for China, Uber does has the scale when it comes to all the other markets. So I think it's a hard business to disrupt unless you've got scale.
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