Satellite : Why Is Warren Buffett Buying Up DIRECTV?

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Why Is Warren Buffett Buying Up DIRECTV?

By Swanni

Washington, D.C. (February 15, 2012) -- Warren Buffett's Berkshire Hathaway yesterday revealed that it increased its stake in DIRECTV by 379 percent in the fourth quarter, bringing its total to 20.3 million shares, compared to 4.2 million at the end of the 2011 third quarter.

At yesterday's stock market close, DIRECTV's shares finished at $45.85, which means Buffett's investment company increased its stake by more than $738 million. The billionaire's firm now holds roughly $933 million in DIRECTV stock.

That makes Buffett one of the 10 largest shareholders in DIRECTV, according to Reuters.
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Buffett's company yesterday increased its stake in a handful of other media companies, including Liberty Media. But the other investments were tiny in comparison to the extraordinary increase in DIRECTV shares.

Reuters speculates that Buffett's overall interest in added media investment is influenced heavily by his firm's new investment manager, Todd Combs. But Buffett's interest in investing more heavily in DIRECTV will have TV industry tongues wagging for some time.
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The Nebraska-born billionaire is regarded as one of the world's wealthiest individuals and one of the business world's shrewdest investors. Buffett might see DIRECTV, which now has roughly 20 million pay TV subscribers, as a solid investment because the company could be an acquisition target. Or, the businessman could simply see DIRECTV as a company with a significant upside. The satcaster has been able to add subscribers in these tough economic conditions while its cable TV rivals have not.

Regardless, Buffett's relationship with DIRECTV -- and whether DIRECTV makes any changes based on Berkshire's added influence -- will likely be closely viewed in the coming months.