RH shares fell 8% thanks to Warren Buffett's Berkshire Hathaway

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Matthew Fox
Wednesday, May 17, 2023 at 4:35 GMT+3
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Charlie Munger, left, and Warren Buffett, right
Charlie Munger and Warren Buffett. Nati Harnick/Associated Press
RH's share price fell 8% on Tuesday after Warren Buffett's Berkshire Hathaway sold its entire stake in the home furnishings company.

Berkshire Hathaway began building its stake in RH in 2019Q3, which was valued at about $575M.

RH shares are down 67% from their post-pandemic highs, but Buffett still profited from the company.

Shares of RH fell 8% on Tuesday after Berkshire Hathaway said Warren Buffett sold his entire stake in the luxury home furnishings company last quarter.

Berkshire first purchased RH stock in the third quarter of 2019, when the stock was trading in a range of $110 to $160.

The stake grew with subsequent purchases until the conglomerate amassed 2.36 million shares of the company worth about $575 million at the end of the first quarter.

RH CEO Gary Friedman has been a fan of Warren Buffett, often quoting him during the company's earnings calls over the years.

After Buffett's initial purchase, shares of the company, formerly known as Restoration Hardware, have soared more than 400% as the pandemic prompted consumers to refurbish their homes.

But RH shares have fallen significantly since their post-pandemic peak of nearly $750, falling 67% to today's price of about $244.

Despite the steep decline, however, Buffett's Berkshire likely made a small profit on its stake, as it bought the bulk of its position for less than $200 a share.