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$6.47bn: Warren Buffett’s costly mistake
The latest shareholder letter from Warren Buffett’s investment business Berkshire Hathaway reveals how one acquisition is ingrained in the legendary investor’s memory for a bad reason.
Berkshire paid $434m for Dexter Shoe in 1993 and the value of the business soon went to zero. It paid for the acquisition in equity, giving Dexter’s sellers 25,203 shares in Berkshire. That amount of stock is now worth an eye-watering $6.47bn.
His error caused Berkshire shareholders to hand out far more than they received. ‘Today, I would rather prep for a colonoscopy than issue Berkshire shares,’ says Buffett.