1 Stock Warren Buffett Could Target Next With Berkshire's $334 Billion Cash Pile
Frontier Communications Parent is a merger arbitrage worth exploring.
Recently, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), the $1.1 trillion holding company with a diverse portfolio of businesses and stocks, released its annual report, revealing a record $334 billion in cash, cash equivalents, and U.S. Treasury bills. One way Warren Buffett, CEO and chairperson for Berkshire, could deploy some of that cash is through merger arbitrage, a short-term approach that involves buying stocks of companies trading below their acquisition price.
Verizon's (NYSE: VZ) pending $20 billion acquisition of Frontier Communications Parent (NASDAQ: FYBR) has created one such opportunity. So, let's explore why Buffett, a famously long-term investor, favors this tactic and whether Frontier stock is worth considering.
Despite his reputation as a long-term investor, Buffett has engaged in merger arbitrages for more than 30 years, including three notable ones within the past decade.
