OLD Media Moves

Biz media got Buffett investment in CarMax wrong

November 20, 2007

Posted by Chris Roush

Alex Taylor III of Fortune writes Tuesday about how the business media muffed its coverage of billionaire investor Warren Buffett buying a stake in auto retailer CarMax.

Warren BuffettTaylor wrote, “But a close reading of the 13-F SEC filing by Buffett’s company, Berkshire Hathaway, suggests that Buffett wasn’t directly involved. First of all, the size of the investment – less than 14 million shares worth $258 million – wouldn’t be big enough to interest Buffett. That’s pocket change for him. Berkshire recently had investments worth $108 billion so Buffett has to take big stakes in order to make a significant impact on his portfolio.”

Later, he added, “Urban legend though it may be, the news of Buffett’s alleged investment may be difficult to stamp out. CarMax certainly isn’t trying very hard. When it heard about the Berkshire investment, it started celebrating about the fortuitous timing – the company is planning to open a new outlet in Omaha next month and had invited Buffett to the opening. ‘Now I’m thinking he might actually do it,’ Katherine Kenny, the assistant vice president of investor relations, was quoted as saying.

“When informed by Fortune a few days later that Buffett himself was likely not the actual buyer of the shares, she replied: ‘We don’t really care. We’re just happy that Berkshire is interested in and confident in our business plan.’ Some investors seem to have gotten the message, though. The stock price has since settled back down to $21.74 — basically where it was before the Buffett reports.”

Read more here. And coverage linking Buffett to CarMax can be found here, here and here.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.