Berkshire Hathaway’s (BRK.B) stock is down 6% on news that Warren Buffett is stepping down as the company’s CEO at year-end.
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It’s the steepest one-day drop for BRK.B stock since the onset of the Covid-19 pandemic and a big move lower for Berkshire Hathaway, which has a reputation for being a steady and reliable blue-chip name. The selloff comes after Buffett announced at Berkshire’s annual shareholder meeting on May 3 that he will step down as CEO at the end of 2025, surprising both shareholders of the holding company and his successor Greg Abel.
Berkshire Hathaway’s board of directors met on May 4 and voted unanimously to make Abel president and CEO of the company effective Jan. 1, 2026. Buffett, who is age 94, will remain as chairman of Berkshire Hathaway, the company he has owned and run since 1965.
Buffett’s Successor
Buffett is Berkshire Hathaway’s largest shareholder and continues to own 15% of the diversified holding company that has interests in everything from railroads and insurance to restaurant chains and furniture retailers. Abel, age 62, is currently vice chairman of non-insurance operations at Berkshire Hathaway and overseas most of the company’s investments.
A Canadian who is originally from the western city of Edmonton, Abel holds an accounting degree from the University of Alberta and is a certified public accountant. He was named by Buffett as his successor several years ago and has been waiting to take the helm ever since.
Financial Results
Also pushing BRK.B stock lower are Berkshire Hathaway’s latest financial results, which were released to coincide with the annual shareholder meeting. The results showed that the company’s operating earnings, which include the insurance and railroad businesses, declined 14% to $9.64 billion.
Much of that decline was driven by a 48% decrease in Berkshire’s insurance-underwriting profit, due in large part to the Los Angeles, California wildfires. Berkshire’s cash pile rose to a record during the year’s first quarter, climbing to $347 billion from $334 billion at the end of 2024.
The company was a net seller of stocks during Q1 for a 10th consecutive quarter. Buffett blamed tariff uncertainty for at least part of Berkshire Hathaway’s disappointing quarterly results and said at the annual meeting that “trade should not be a weapon.”
The stock of Berkshire Hathaway has risen 12% this year, far outpacing the broader stock market that is in negative territory in 2025. Berkshire’s more affordable Class B stock currently trades at $508.33 per share.