Oracle of Omaha Cashes Out

Oracle of Omaha Cashes Out

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  • Berkshire Hathaway's exit from Paytm-parent One97 Communications is now complete, resulting in a notable loss of approximately 40% on the investment made over five years ago. In 2018, Warren Buffett's firm invested around $260 million in Paytm, securing a 3% stake in the financial services startup when its valuation stood at about $10 billion. Despite selling a $36 million stake in 2021 at a profit, Berkshire finalized the divestment on Friday by selling its remaining position for $121.6 million, yielding a return of less than $160 million on the initial investment.

  • Paytm, which faced challenges post its IPO debut at $25.8 per share in 2021, experienced a significant drop to as low as $5.58 a year ago. However, the Indian firm has since staged a rebound. This resurgence comes on the back of robust financial performance, with Paytm reporting a strong 32% YoY revenue growth in F2Q24, showcasing strength in payments and sustained loan growth. The company's improved finances and consistent revenue growth in recent quarters have contributed to its revival in the market.

Why it matters

Despite the challenging journey, Paytm's turnaround underscores its resilience and adaptability in the dynamic financial services landscape. The strategic focus on payments, coupled with steady loan growth and enhanced profitability, positions Paytm on a positive trajectory as it continues to navigate and thrive in the evolving market conditions.

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