Taiwan Semiconductor stock slides premarket after Warren Buffett slashes holding

Yahoo Finance Live anchors Julie Hyman, Brad Smith, and Brian Sozzi discuss the decline in stock for Taiwan Semiconductor.

Video Transcript


BRIAN SOZZI: Shares of Taiwan Semiconductor on the move after Warren Buffett’s Berkshire Hathaway reduced its holdings in the chip maker, selling billions of dollars worth of shares just months after taking a major stake in the company in what is an unusually quick reversal for Warren Buffett.

Of course, Warren Buffett is known to basically and sometimes hold stocks on forever. I can’t help but to think about Coca-Cola, a longtime holding of his. But again, this move by Warren Buffett really pressuring shares of Taiwan Semiconductor and unclear why he would be dumping that top ticker on our site.

BRAD SMITH: Yeah, I mean, they held about $4.1 billion worth of shares in November, sold 86% of it here, so a massive move here. Of course, Taiwan Semiconductor had already reported earnings last month in January, so perhaps something within that didn’t perhaps sit right with Buffett the stock market slayer over here.

BRIAN SOZZI: Well, he’s essentially saying that maybe the computer market, the PC correction doesn’t end this year. We’ve heard a lot of these PC makers, of course, with their own agendas telling us maybe later this year people will go out and buy more PCs, demand will come back. You’ll need more semiconductor chips. But I don’t know. I read Warren Buffett’s thing saying maybe this continues into next year.

JULIE HYMAN: Or maybe we shouldn’t read anything into it at all. I mean, that’s why– like, this is the issue. We don’t know, right? That’s the thing with these 13F filings. All they are is a snapshot of a moment in time of what the holdings were. It could just be– although it would be unusual, to be fair for Warren Buffett, it could just be he wanted to take a profit, saw the opportunity to take a profit, and he took it.


JULIE HYMAN: And– and we always, like, use Warren Buffett as– totally analogous with Berkshire Hathaway. As we know, he doesn’t– he probably has to approve a move like this, but he doesn’t necessarily initiate a trade like this. That could be his lieutenants over there at Berkshire Hathaway. So could it be a signal of what they’re seeing in the PC market? Could it be a signal of a style– a little bit of a style change at Berkshire Hathaway as we see maybe his lieutenants– just like Apple was a departure for Berkshire Hathaway.

BRAD SMITH: And now their biggest holding.

JULIE HYMAN: I don’t know. I’m just wildly theorizing.

BRIAN SOZZI: Well, could they– could they be freeing up cash to make a big purchase? That’s the other one.

JULIE HYMAN: Although they have had a lot of cash sitting around.


JULIE HYMAN: So I don’t see–

BRIAN SOZZI: It’s not challenging days at Berkshire Hathaway.


BRIAN SOZZI: They have more cash [? to ?] Airbnb, let’s put it that way.

JULIE HYMAN: And by the way, a lot of other hedge funds we learned in the 13Fs picked up Taiwan Semiconductor. So that was interesting too.

BRAD SMITH: Yeah. So we’ll see exactly what comes for TSMC. They’re trying to open up more capacity as well within their 7 nanometer and more advanced technologies. So we’ll get a little bit more nerdy as we hear a few more of those advancements as well.