(Reuters) - Berkshire Hathaway Inc Chief Executive Warren Buffett said he has stage 1 prostate cancer and will begin a two-month treatment in mid-July consisting of daily radiation treatments.
Buffett, 81, said in a statement that his condition “is not remotely life-threatening or even debilitating in any meaningful way.” Berkshire shares fell 1.5 percent in after-hours trading on the news.
“My guess is that the cancer diagnosis was partially behind the depth of the succession disclosure. It would make sense that Buffett would be proactive in sharing future plans given the reasonable expectation that the market would panic at the thought of him exiting the company.
“Despite the news, this is not a reason to sell BRK. Fundamentals are still good at the company and the clear succession plan does give clarity about the future path of the firm.”
JEFF MATTHEWS, A LONG-TIME BERKSHIRE INVESTOR AND AUTHOR OF THE BOOK “SECRETS IN PLAIN SIGHT: BUSINESS AND INVESTING SECRETS OF WARREN BUFFET”
“A definite shock to the Berkshire family, but that’ll pass, I think. He’s mortal, we knew that. If you’re going to get a cancer, Stage 1 prostate cancer is as good as it gets. If you’re going to get prostate cancer, not getting it until you’re 81 is as good as you could ask for. A doctor friend of mine always says a man will die of old age before he dies of Stage 1 prostate cancer...and Buffett is beyond old age.
“I think it means zero for Berkshire investors. He’s been getting the company ready for the day he dies: moving from stocks into companies and thereby building a conglomerate out of a stock portfolio; identifying a CEO successor with Board approval; hiring two hedge fund managers to eventually take over the investment side; merging Wesco into Berkshire.
“So no, it means nothing today or tomorrow, stock-wise. It’s a shock, but it’ll wear off quickly. If the news was ‘he has pancreatic cancer,’ well, it would be a shock and then a lot of hand-wringing.”
STEVE CHECK, CHIEF INVESTMENT OFFICER OF CHECK CAPITAL MANAGEMENT
“I don’t think the succession disclosures in the annual letter had anything to do with the cancer diagnosis. If he had known about the cancer when the annual report came out, I believe he would have disclosed it then. It is my guess he has only learned about the cancer in the last week or two.
“It is my estimate that Berkshire’s book value per share ended the quarter at about $70 per ‘B’ share. That would place the buyback price at $77. If the stock happens to pullback to that price, it will be interesting to see how many shares Berkshire buys and what the price does. It could be a dry run for when the real event eventually happens.
“I expect Buffett to be similar to how he always has been at the annual meeting in a few weeks. Frankly, I think the succession issue gets talked about too much with Berkshire. Berkshire is a huge operating company with many businesses where Buffett has little involvement. Capital allocation can always move towards paying dividends and buying back shares so all the new capital doesn’t have to be allocated as Buffett has done in the past. I don’t think the new person is going to make a mess of things.”
PHIL ORLANDO, CHIEF EQUITY MARKET STRATEGIST AT FEDERATED INVESTORS, NEW YORK
“We all feel bad for Mr. Buffett and I wish him nothing but the best in terms of his medical care but I don’t know this will have any impact on the equity market.
“There might be a knee jerk reaction to the downside (on the Berkshire stock) but recognizing Mr. Buffett’s advanced age and the fact that he has been actively working on a succession plan now for some years, I guess investors in Berkshire need to be comfortable with the plan and the personnel that he has in place in the event that his illness takes a turn for the worst.
“At his age he has to recognize this day was coming sooner or later. That’s why he has put as much effort into his succession plan as he has and this is where that pays off.”
DOUG KASS, PRESIDENT OF SEABREEZE PARTNERS IN PALM BEACH FLORIDA, WHICH OWNS B SHARES
“This is basically the downside to this company. (The stock) is less attractive because there is no one who can replace Buffett.”
LOUIS POTTERS, CHAIRMAN OF RADIATION MEDICINE AT NORTH SHORE-LIJ HEALTH SYSTEM IN NEW YORK, WHO HAS NOT TREATED BUFFETT
“The first is, it sounds like without knowing any of the details, his prognosis is going to be excellent. The majority of men with prostate cancer do not die from prostate cancer, they die with it.
“The type of radiation he’s getting - it sounds like it’s the standard treatment. It’s not like the bells and whistles that are popular now, like protons and radiosurgery. This is a very standard type of radiation treatment that’s highly effective, and should offer him a very high likelihood of successful management of the disease.”
Reporting by Ben Berkowitz, Alistair Barr, Rodrigo Campos and Rick Rothacker, Anna Yukhananov, Compiled by Tiffany Wu