Two Billionaire troubled by financial turmoil
08 Nov 2008 |
November 2008 - Billionaire Warren Buffett’s Berkshire Hathaway Inc. posted a fourth straight profit drop, the longest streak of quarterly declines in more than a decade, as hurricanes hurt returns at insurance operations and investments lost value. Hurricanes Ike and Gustav cost insurers a combined $10 billion when they struck the Gulf Coast in September, according to preliminary data from Insurance Services Office Inc. Although losses has been significant, Buffett committed at least $28 billion this year to acquire companies, finance buyouts and purchase securities. In the past two months, he agreed to spend $5 billion of Berkshire’s cash for a stake in Goldman Sachs Group Inc., and another $5 billion in preferred shares of General Electric Co.
He also agreed in July to lend $3 billion to Dow Chemical Co. to help fund that firm’s takeover of Rohm & Haas Co., and committed $6.5 billion in April to help Mars Inc. buy chewing gum maker Wm. Wrigley Jr. Co. Berkshire’s MidAmerican Energy Holdings Co. struck a deal in September to pay $4.7 billion for Constellation Energy Group Inc.
Sheldon Adelson’s casino company, fell the most in New York trading since going public after saying it may default on debt and face bankruptcy. He said that it probably won’t meet the requirements of loans unless it cuts spending on developments, boosts earnings at its Las Vegas Strip casinos and raises more capital.
The shares dropped $3.81, or 33 percent, to $7.85 at 4:04 p.m. in New York Stock Exchange composite trading, the biggest decline since its initial share sale in December 2004. Las Vegas Sands had tumbled 91 percent before November 2008 as investors dumped the stock, worried that falling casino winnings and the global financial meltdown would leave the company without enough cash.
Tags: Berkshire Hathaway, casino, Constellation Energy, Dow Chemical, General Electric, Goldman Sachs, Hurricanes Gustav, Hurricanes Ike, Sheldon Adelson, Warren Buffett, Wrigley
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