(Reuters) -Berkshire Hathaway shares fell 2.6% in premarket trading on Monday after revered investor Warren Buffett said he would be stepping down as chief executive of the conglomerate after 60 years at the helm.
The world’s most famous investor said at Berkshire’s annual meeting on Saturday he would hand over the reins to Vice Chairman Greg Abel at the end of the year.
Class B shares of the $1.16 trillion conglomerate dipped to $525.96, potentially wiping out billions of dollars in market value if losses hold through the session.
The surprise announcement, “notwithstanding likely successor Greg Abel’s increasingly demonstrated competence, should pressure the shares on Monday,” KBW analyst Meyer Shields wrote in a note.
Berkshire shareholders said it remains unclear how the conglomerate’s 189 operating businesses, $264 billion of stocks and $348 billion of cash will fare after the man so intertwined with it leaves the stage.
Buffett’s announcement “will probably impact investors’ view of Berkshire more than it will actual operations,” Shields added.
Berkshire shares have jumped about 33% over the past year, outperforming the 12% rise in the benchmark S&P 500.
Prior to Buffett’s announcement, which Abel was unaware was coming, the vice chairman told attendees at the annual meeting he would be “more active, but hopefully in a very positive way,” in overseeing Berkshire subsidiaries, though they would continue running “very autonomously”.
Leaders of most Berkshire businesses have reported to Abel since 2018, while its insurance units such as Geico, General Re and National Indemnity have reported to Vice Chairman Ajit Jain, which they will continue doing.
(Reporting by Medha Singh in Bengaluru; Editing by Mrigank Dhaniwala and Krishna Chandra Eluri)
