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Amazon-Berkshire Announcement – Emerging Factory-Building Elephant in the Room?

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There was no mention this evening of factory-home building when CNBC or some other mainstream business media reported that Berkshire Hathaway has taken a position valued at some $904 million dollars as of the close of the market on 5.15.2019.  But then most others aren’t as keen on factory-built housing, or as in tune with what an announcement like this might suggest for our industry.

First, let’s start with some pull quotes from left-of-center CNBC, plus their video.

  • Berkshire’s stake in Amazon was 483,300 shares at the end of the quarter ended March 31, according to a filing at the Securities and Exchange Commission.
  • The value of that stake is $904 million by the closing bell Wednesday.
  • Buffett first disclosed the new investment in Amazon to CNBC on May 2, though the size of the position was not previously reported to the public.

Buffett told CNBC on May 2, One of the fellows in the office that manage money … bought some Amazon, so it will show up in the 13F.”  Chairman Buffett was likely referring to lieutenants, Todd Combs or Ted Weschler, who each manage portfolios of more than $13 billion in equities for Berkshire.

Yeah, I’ve been a fan, and I’ve been an idiot for not buying” Amazon shares, Buffett said at the time. “But I want you to know it’s no personality changes taking place.”

Berkshire Hathaway’s report revealed an 18% increase in its J.P. Morgan Chase stake to 59.5 million shares, underscoring the Oracle of Omaha’s love of big financial institutions.

If one goes back to the announcement made the morning of President Donald J. Trump’s 2018 State of the Union (SOTU), Buffett, Amazon’s/Washington Post’s Jeff Bezos, and Chase’s Jaime Dimon’s healthcare initiative sent those stocks south.  There was speculation that the timing was in part a move to embarrass POTUS Trump, who had been bragging about the rising stock markets.

Buffett has long been a Trump critic, even before Mr. Trump’s 2015 announcement of what became a successful White House campaign.

Be that as it may, Amazon’s Alexa Fund invested in 2018 in Plant Prefab, a factory housing builder. With Berkshire’s Clayton Homes dominating HUD Code manufactured homes, and announcing even more prefabricated construction plans on their conventional housing side, there are reasons to be watchful how these developments play out over time.

Details Emerging on Amazon’s Plans for Plant PreFab Modular Home Investment

We’ll track these developments and report as warranted.

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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.

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