- A vote of confidence from one of Warren Buffett’s lieutenants sent Dillard’s stock up as much as 46% on Monday.
- Ted Weschler, an investment manager at Buffett’s Berkshire Hathaway, disclosed an almost 6% stake in the ailing department-store chain on Friday.
- The value of Weschler’s 1.08 million shares soared to as high as $66 million on Monday.
- Dillard’s net sales tumbled 41% year-on-year in the six months to August 1, fueling a $171 million net loss.
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Dillard’s stock surged as much as 46% on Monday after Warren Buffett’s deputy disclosed a nearly 6% stake in the ailing department-store chain.
Ted Weschler, who helps Buffett manage Berkshire Hathaway’s investment portfolio along with Todd Combs, revealed the personal holding in a Securities and Exchange Commission filing released on Friday. The value of Weschler’s 1.08 million Dillard’s shares jumped to as much as $66 million on Monday.
Dillard’s stock had dropped about 40% this year, reflecting the coronavirus pandemic’s devastating effect on physical retailers, as well as investors’ growing concerns about department stores in an increasingly online world.
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The Monday rally added as much as $430 million to the retailer’s market capitalization, boosting it to about $1.4 billion at the peak.
The company’s net sales tumbled 41% year-on-year, to $1.7 billion, in the six months to August 1, swinging it to a $171 million net loss compared with $38 million in net income in the first half of 2019. Two of its peers, JCPenney and Neiman Marcus, have filed for bankruptcy this year.
Dillard’s was also removed from the S&P 400 in June, as the S&P Dow Jones Indices officials in charge of the index said it was “no longer representative of the midcap market space.”
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Weschler joined Berkshire in 2012, after shelling out more than $5 million across two charity auctions in 2010 and 2011, earning him the right to privately dine with Buffett twice. He previously ran Peninsula Capital Advisors, a hedge fund in Virginia.
The investment manager channeled Buffett in his recent Scripps deal. He agreed that Berkshire would give $600 million to help finance the broadcasting group’s takeover of ION Media in exchange for preferred shares and stock warrants — emulating Buffett’s investments in Goldman Sachs and General Electric during the 2008 financial crisis.
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