- Warren Buffett suffered a $ 1 billion loss after Kraft Heinz shares fell 11% in two days this week.
- Berkshire Hathaway's 27% stake in the food giant declined from $ 9.8 billion between Thursday and Friday to $ 8.7 billion.
- Kraft Heinz saw a sharp drop in sales and earnings in the fourth quarter on Thursday.
- Fitch lowered the credit rating of Kraft Heinz bonds to "junk" on Friday.
- You can find more stories on the Business Insider homepage.
Warren Buffett lost more than $ 1 billion this week Kraft Heinz The stock fell 11% within two days.
According to Bloomberg, the famous investor's Berkshire Hathaway conglomerate owns about 27% of the food giant. The value of his stake fell from $ 9.8 billion between Thursday and Friday to $ 8.7 billion after a double strike of disappointing earnings and a cut in creditworthiness hit Kraft Heinz stocks.
On Thursday, the maker of Heinz ketchup, Kraft macaroni and cheese saw fourth quarter net sales decrease 5% and adjusted earnings per share decrease 14%. CEO Miguel Patricio said performance was "disappointing" in a press release,
On Friday, Fitch lowered Kraft Heinz's credit rating from BB + to BBB- and downgraded its bonds to non-investment grade or "junk". Bloomberg reported, The rating agency referred to the company's high mountain of debt, falling profits and the negative outlook.
The Kraft Heinz share has fallen by almost 75% since its peak in February 2017, which underlines the extent of Buffett's mistakes.
The so-called "Oracle of Omaha" has teamed up with the private equity group 3G Capital to buy Heinz on Valentine's Day 2013 for around $ 28 billion. The couple then co-financed Heinz's $ 50 billion merger with Kraft Foods in 2015. Kraft-Heinz’s market capitalization is currently less than $ 33 billion.
"We are trying to buy good business at a reasonable price and we made a mistake in the Kraft part of Kraft Heinz," Buffett said at the Berkshire annual meeting last year. "We paid too much money."