Finance

HD Hyundai Marine Solution’s IPO is South Korea’s largest since January 2022, when LG Energy Solution went public.
The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering.
The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.

Employees of HD Hyundai Marine Solution Co., during the company’s listing ceremony at the Korea Exchange in Seoul, South Korea, on Wednesday, May 8, 2024. HD Hyundai Marine, a ship repair company, jumped as much as 45% in its South Korea trading debut after a 742.3 billion won ($547 million) initial public offering that was priced at the top of a range and met strong demand.
Bloomberg | Bloomberg | Getty Images

Shares of maintenance and repair firm HD Hyundai Marine Solution nearly doubled in their trading debut Wednesday, marking a strong start to South Korea’s largest IPO since January 2022.
Shares traded as high as 166,100 South Korean won ($121.59) apiece, representing a 99.1% surge from the IPO price of 83,400 won. The stock closed at 163,900 won, representing a gain of 96.52%.

The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering. The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.
Half — or 4.45 million—of the IPO shares are newly issued.
The company’s IPO showed strong investor interest, with both the institutional and retail offering oversubscribed by over 200 times combined.
The Wall Street Journal, citing HD Hyundai officials, reported that the parent conglomerate, which held a 62% stake in its unit ahead of the IPO, will continue to be in control.
Meanwhile, KKR, the second-largest shareholder since 2021, plans to gradually reduce its stake, which currently stands at 38%. More

Since Russia began its invasion in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have escaped the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. “If you can drive a tractor, you can drive a tank,” notes Mr Kachka. Farmers therefore not only have new opportunities to evade taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More

Since Russia invaded in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have left the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. Farmers therefore not only have new opportunities to dodge taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More

Billionaire investor Stanley Druckenmiller revealed Tuesday that he has slashed his big bet in chipmaker Nvidia earlier this year, saying the swift artificial intelligence boom could be overdone in the short run.
“We did cut that and a lot of other positions in late March. I just need a break. We’ve had a hell of a run. A lot of what we recognized has become recognized by the marketplace now.” Druckenmiller said on CNBC’s “Squawk Box.”

Druckenmiller said he reduced the bet after “the stock went from $150 to $900.” “I’m not Warren Buffett; I don’t own things for 10 or 20 years. I wish I was Warren Buffett,” he added.
Nvidia has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models, which are developed on the company’s pricey graphics processors for servers. The stock was one of the best performers last year, rallying a whopping 238%. Shares are up another 66% in 2024.

Arrows pointing outwards

The notable investor, who now runs Duquesne Family Office, said he was introduced to Nvidia by his young partner in the fall of 2022, who believed that the excitement about blockchain was going to be far outweighed by AI.
“I didn’t even know how to spell it,” Druckenmiller said. “I bought it. Then a month later ChatGPT happened. Even an old guy like me could figure out okay, what that meant, so I increased the position substantially.”
While Druckenmiller has cut his Nvidia position this year, he said he remains bullish in the long term on the power of AI.

“So AI might be a little overhyped now, but underhyped long term,” he said. “AI could rhyme with the Internet. As we go through all this capital spending we need to do the payoff while it’s incrementally coming in by the day. The big payoff might be four to five years from now.”
The widely followed investor also owned Microsoft and Alphabet as AI plays over the past year.
Druckenmiller once managed George Soros’ Quantum Fund and shot to fame after helping make a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.  More

Citigroup CEO Jane Fraser said Monday that consumer behavior has diverged as inflation for goods and services makes life harder for many Americans.
Fraser, who leads one of the largest U.S. credit card issuers, said she is seeing a “K-shaped consumer.”
That means the affluent continue to spend, while lower-income Americans have become more cautious with their consumption.

Citigroup CEO Jane Fraser said Monday that consumer behavior has diverged as inflation for goods and services makes life harder for many Americans.
Fraser, who leads one of the largest U.S. credit card issuers, said she is seeing a “K-shaped consumer.” That means the affluent continue to spend, while lower-income Americans have become more cautious with their consumption.

“A lot of the growth in spending has been in the last few quarters with the affluent customer,” Fraser told CNBC’s Sara Eisen in an interview.
“We’re seeing a much more cautious low-income consumer,” Fraser said. “They’re feeling more of the pressure of the cost of living, which has been high and increased for them. So while there is employment for them, debt servicing levels are higher than they were before.”
The stock market has hinged on a single question this year: When will the Federal Reserve begin to ease interest rates after a run of 11 hikes? Strong employment figures and persistent inflation in some categories have complicated the picture, pushing back expectations for when easing will begin. That means Americans must live with higher rates for credit card debt, auto loans and mortgages for longer.
“I think, like everyone here, we’re hoping to see the economic conditions that will allow rates to come down sooner rather than later,” Fraser said.
“It’s hard to get a soft landing,” the CEO added, using a term for when higher rates reduce inflation without triggering an economic recession. “We’re hopeful, but it is always hard to get one.”

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Berkshire Hathaway shares rose Monday after Warren Buffett’s conglomerate reported a surge in operating earnings as well as a record cash hoard. Berkshire’s Class A shares were higher by 0.3%, while Class B shares gained about 0.4%.
The company’s stock has already outperformed this year, with each share class having advanced more than 10%. The S&P 500 is up by over 7% this year.

Warren Buffett poses with Martin, the Geico gecko, ahead of the Berkshire Hathaway Annual Shareholder’s Meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogan | CNBC

Berkshire Hathaway shares rose Monday after Warren Buffett’s conglomerate reported a surge in operating earnings as well as a record cash hoard.
The company’s Class A shares were higher by 0.3% in morning trading. Meanwhile, Class B shares last gained about 0.4%.

Those moves come after Berkshire posted first-quarter operating profit of $11.22 billion, up 39% from the year-ago period, mainly driven by an increase in insurance underwriting earnings. Operating profit measures earnings encompassing all of Berkshire’s businesses.

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Berkshire Hathaway Class B

The strength in the insurance businesses, particularly its crown jewel Geico, comes as the sector as a whole benefits from stronger demand and increased pricing power. Insurance underwriting earnings rose to $2.598 billion, a 185% increase from $911 million in the year-earlier quarter. Geico earnings swelled 174% to $1.928 billion from $703 million a year prior.
Berkshire’s cash hoard swelled to a record, partly due to the holding company’s inability in recent years to find a suitable acquisition target. Cash soared to a record $188.99 billion in the first quarter, up from $167.6 billion in the fourth quarter.
“We had much-improved earnings in insurance underwriting. And then our investment income was almost certain to increase,” Buffett said Saturday at the conglomerate’s annual shareholder meeting in Omaha, Nebraska. “And I said that in the annual report because yields are so much higher than they were last year. And we have a lot of fixed, short-term investments that are very responsive to the changes in interest rates.”
Berkshire Hathaway shares have already outperformed this year, with each share class having advanced more than 10%. The S&P 500 is up by more than 7% this year.

Class A shares marked an all-time closing high this year, reaching $634,440 in March; they closed at $603,000 on Friday. Class B shares were recently priced Monday at about $402.60 a share, or about 4% below their record close of $420.52, also set in March.
But Wall Street analysts continue to be positive on the company’s outlook. UBS analyst Brian Meredith has a buy rating on Berkshire, citing the earnings beat and noting that Geico is on pace to catch up to competitors Progressive and others on data analytics by 2025. His $734,820 price target, raised from $722,234, is nearly 22% above where the shares closed Friday.
Elsewhere, Edward Jones’ analyst James Shanahan has a hold rating on Berkshire, saying the current stock price is already fairly priced. However, he said he continues to “expect solid earnings from BRK’s diverse group of operating companies.”
Correction: UBS analyst Brian Meredith’s price target is nearly 22% above where the shares closed Friday. An earlier version misstated the percentage.

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OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”

Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.

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Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war. More

“I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting.
While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio.

OMAHA, Nebraska — Warren Buffett said Saturday his designated successor Greg Abel will have the final say on Berkshire Hathaway’s investing decisions when the Oracle of Omaha is no longer at the helm.
“I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting. “If you understand businesses, you’ll understand common stocks.”

Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger inadvertently made the revelation at the shareholder meeting. Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail.
Buffett offered the clearest insight into his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investing icon, who’s turning 94 in August, said his decision is influenced by how much Berkshire’s assets have grown.
“I used to think differently about how that would be handled, but I think that responsibility should be that of the CEO and whatever that CEO decides may be helpful,” Buffett said. “The sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. It just doesn’t work.”
Berkshire’s cash pile ballooned to nearly $189 billion at the end of March, while its gigantic equity portfolio has stocks worth a whopping $362 billion based on current market prices.
“I think what you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things,” Buffett added. “I think the responsibility ought to be entirely with Greg.”

While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio, where Buffett has garnered a huge following by racking up huge returns through investments in the likes of Coca-Cola and Apple.
Berkshire investing managers, Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock  portfolio (about 10%) for about the last decade. There was speculation that they may take over that portion of the Berkshire CEO role when he is no longer able.
But it seems, based on Buffett’s latest comments, that Abel will have final decisions on all capital allocation — including stock picks.
“I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move,” Buffett said.
Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s equity portfolio is worth $362 billion. A previous version misstated the figure. More