Berkshire Bought Delta at 48, Sold at 23 Weeks Later

Buffett bought Delta at 48, sold at 23 three weeks later

According to the thread's count, on February 27 Berkshire Hathaway bought Delta Air Lines shares at 48 dollars and sold them by early April at 23. Between those dates, Warren Buffett's holding shed a position valued at about 350 million dollars and absorbed the brutal drop in air transport. No top sale, no guru reflexes: the operation, as known, is that of someone who holds on until they can't anymore.

The figures Berkshire held in Delta before selling

In November 2019, the holding had accumulated 70.9 million shares of Delta at an average price of 43 dollars per share, with purchase lows of 39 and entries over 55. With the market in freefall, it loaded up again: 45.3 million dollars in a single batch at 46 per share. It was the penultimate act before liquidating everything, first at 26 dollars and then at 23. Buying cheap lowers the average price; here, the average price was pulverized.

The sale was not a discreet exit. It liquidated more than was bought over that same exercise, in a period of less than three weeks.

Why did Buffett sell the airlines at a loss?

Because cash was escaping faster than any thesis could hold. The pattern of the operation is not that of a maturing bet, but of an orderly withdrawal —reluctant, but withdrawal— of the entire US air sector. The sequence reinforces this reading: there was no sweet moment, there was a drip.

The prevailing explanation is not that of the patient investor waiting years, but of one who prefers to take a book loss today rather than fund an operational hole tomorrow. Some argue that if a 10% or 15% drop were truly expected, one wouldn't mount such a large operation. The scenario whispered is much worse: holding cash to repurchase much lower. With 850 million moved in two weeks in the sector, according to the thread's count, the message is hard to interpret otherwise.

60 million dollars a day and no international routes

As recalled in the thread, Delta's CEO put the figure on the table: 60 million dollars daily in cash burned in early April. A month later, the arithmetic places the total at about 1.800 million, around 13% of its capitalization evaporated without a single plane in the air for business. It's not a demand problem: it's a problem of being stopped.

And the pause has no end date. With no clear de-escalation path in the US and no promise to reopen international routes, any air business model loses its two key variables. With oil at bargain prices, 40% occupancy still yields losses: cheap fuel doesn't compensate for flying half-empty.

The 25 billion rescue and its fine print

Washington approved a line of 25 billion dollars for the sector. On paper, it sounds like a lifeline; in practice, according to the distribution described in the thread, the money goes mostly to paying payroll, with a scheme where the company covers about 30% of the wage bill for every hundred dollars received, and the state the rest. A rescue that sustains the workforce, not the balance sheet.

With that design, the aid serves to avoid mass layoffs while waiting for reopening. It doesn't resolve the debt accumulating underneath. That's where the Omaha investor's exit fits in: cash is king again, after years of repeating that cash was trash.

IAG, Rolls Royce, Norwegian and Embraer: the rest of the board

Outside the US, the map is equally ugly. Some project IAG prices between 1 and 1.20 euros per share, with capital split eightfold from previous levels, and with the warning that everything depends on the company surviving without going bankrupt. The thread also points to Rolls Royce, focused on jet engines, which entered the crisis already hit and faces a capital increase or acquisition by a competitor.

Embraer adds the Brazilian factor: the country's government is studying a financial injection after the Boeing deal collapsed with the pandemic looming. Norwegian Air plays its own hand at the shareholder meeting on May 4. And Brussels, meanwhile, has forced airlines to refund already collected tickets, another blow to cash.

American Airlines, the position still standing

Not everything was sold at once. American Airlines was among the positions the holding kept in its portfolio, in an amount some place as its own, making it the second largest shareholder of the company. Not touching it in the first sweep fueled theories of all kinds within hours.

It may be simple and unepic: selling a large position takes time and prices, and liquidity rules. An airline with a daily loss account is not an asset placed with a click. The mystery, if it exists, will be resolved in the next move.

The day selling airlines was dismissed

There is a scene that summarizes the matter better than any quarterly report. In mid-March, the firm declaration circulated that airlines would not be sold. A few weeks later, the positions were gone and with two-digit losses. Public instruction and private operation do not match.

The final detail is not the money lost, but the message it leaves for the rest of the industry: when the reference investor of half the world cuts at the lows and stays quiet waiting, the sector receives a signal that no earnings release can mask. The cash burned each day does not wait for the calendar to clear.