Berkshire's bullish gas deal; Musk tops Buffett on (one) wealth list
| Wall Street likes seeing Buffett's Berkshire back in the game The reviews weren't great for Warren Buffett's decision to dump Berkshire Hathaway's airline stocks, but the company's move to expand its natural gas business is getting a much better reaction.
Berkshire Hathaway Energy, run by Berkshire co-vice chairman Greg Abel, is paying $4 billion for Dominion Energy's natural gas transmission and storage assets. It will also take on $5.7 billion of Dominion's debt.
It's Berkshire's first big move since the COVID-19 pandemic sent stocks tumbling in March. Buffett's inaction at that time had some suggesting he was being too conservative about spending some of the company's $137 billion in cash. CNN Business notes that while a $10 billion deal doesn't qualify as the "elephant" that Buffett says he likes to hunt for, it "could be a sign that Buffett is finally willing to dip his toes back into the M&A waters. And investors might welcome such a development."
CFRA Research analyst Cathy Seifert tells Bloomberg the deal is a "prudent move" that can be "strategically justified" and "tucked into the existing business model."
"It represents a little bit of an opening of a valve. I don't necessarily think it's a light switch that flipped from off to on."
Hightower Advisors strategist Stephanie Link said on "Squawk Box" that Buffett is sending a "signal" of confidence in the future. But, she also notes, Berkshire got a good price for the assets it's buying due to weakness in the natural gas market.
Musk passes Buffett on Bloomberg list, but not on Forbes ranking Bloomberg reports tonight that thanks to an 11% surge today in Tesla's stock price, CEO Elon Musk has passed Buffett on its Billionaires Index.
It estimates Musk's net worth is $70.5 billion, making him #7 on its list, with Buffett's $69.2 billion putting him in tenth place.
With Tesla up 269% so far this year, and Berkshire down 19%, Bloomberg says Musk's wealth has increased by $43 billion, while Buffett is down $20 billion.
On the Forbes Real-Time Billionaires List, however, Musk's net worth is listed as only $59.3 billion, putting him in the #16 slot, well behind Buffett at #8 with $69.1 billion.  Either way, Buffett's extensive philanthropic donations each year since 2006 around this time are a very big factor in his slide down the wealth rankings.
This week, Buffett donated Berkshire shares worth $2.9 billion to five foundations, with around $2.2 billion going to the Bill and Melinda Gates Foundation.
In a news release noting that Buffett has received "only minor benefits" from tax deductions generated by the 15 years of gifts (43 cents for each $1000), Berkshire says Buffett has contributed the equivalent of 226,000 Class A shares.
They would be worth $62 billion at today's close, so he'd have a net worth of around $130 billion if he had kept them all.
That would make him #2 on both the Forbes list and the Bloomberg list, behind Jeff Bezos at $189 billion.
Berkshire may have been buying Berkshire The SEC filing updating Buffett holdings following the donations indicates Berkshire's outstanding shares have been reduced by 1.2% since April 23, Reuters reports, suggesting Buffett may have stepped up stock buybacks.
Reuters says if Berkshire bought all those shares, the repurchases would be worth $4.9 billion to $5.9 billion, depending on the price paid.
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BERKSHIRE STOCK WATCH
  BERKSHIRE'S TOP STOCK HOLDINGS
 Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of March 31, 2020, as disclosed in the company's May 15 13F SEC filing, except for Bank of New York Mellon, which is as of April 8, 2020 and U.S. Bancorp, which is as of May 12, 2020.
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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-- Alex Crippen, Editor, Warren Buffett Watch
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