By Noah Buhayar, Katherine Chiglinsky and Sonali Basak
(Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. trimmed its investments in Goldman Sachs Group Inc. and Wal-Mart Stores Inc. as the billionaire freed up cash ahead of the completion of one of his largest acquisitions.
Berkshire had about 11 million shares of Goldman Sachs as of Sept. 30, compared with 12.6 million three months earlier, according to a filing Monday disclosing holdings as of the end of the third quarter. The stake in Wal-Mart dropped to 56.2 million shares from 60.4 million.
Buffett agreed in August to buy aerospace-equipment maker Precision Castparts Corp. for more than $30 billion. Standard & Poor’s is reviewing whether to cut Berkshire’s credit rating amid an examination of how Buffett will finance the transaction, which the companies expect to be completed next year. The billionaire told CNBC that he sold some stocks to help pay for the deal, according to a Twitter post from the business news station.
“I’m surprised he had to sell anything to fund the Precision Castparts purchase, with over $60 billion of cash on his balance sheet,” David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business who has taken students to meet Buffett in Omaha, Nebraska, wrote in an e-mail.
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Jeff Matthews, an author of books about Berkshire who previously invested in the company, was also skeptical of Buffett’s justification. Proceeds from selling the Wal-Mart shares were probably less than Berkshire’s dozens of operating businesses make in a week, he said.
“It was a good excuse to trim some stocks that make sense to sell,” Matthews wrote in an e-mail. “Goldman Sachs today operates in a different world than when he bought it during the crisis. And Wal-Mart is under assault from Amazon and not likely to recover.”
