Berkshire Exits Paytm After Sizeable Loss on High-Profile Bet
• Berkshire exited its $260M Paytm stake after shares plunged 40% since the Indian payments firm’s 2021 IPO.
• Paytm has rebounded lately but the exit is a blow to Berkshire’s tech record after past misses like IBM.
• It serves as a warning to Indian startups seeking overseas listings amid valuation risks.
Berkshire’s turbulent ride with Paytm: Exit amid market struggles
On Friday, Berkshire exited its 3% holding in Paytm after selling shares worth $121.6 million, Indian stock exchange disclosures show.
The move caps a turbulent run for the storied investment firm’s first direct Indian startup bet under Buffett.
Berkshire originally poured $260 million into Paytm in 2018 at a $10 billion valuation. But after the mobile payments provider staged a highly-anticipated IPO last year, shares plunged as much as 75% amid a tech rout.
Berkshire recouped under $160 million for its total stake – a nearly 40% loss.
From Enthusiasm to Exit: Berkshire’s Roller-Coaster Investment in Paytm
The exit piles on pain for Paytm, once the darling of India’s startup ecosystem with backers like Alibaba and SoftBank.
But lately, the company has rebounded on fast revenue growth and improved finances. Paytm stock closed Friday at $10.73 after sinking below $6 last summer.
While Berkshire is cutting its losses, the flop deals a blow to its tech investment record after some past misses like IBM.
Paytm’s Bumpy Ride: Recovering from IPO Lows to Rebuild Trust
It serves as a warning as more Indian startups eye overseas listings to tap surging global interest. Paytm’s post-IPO crash laid bare the risk of overheated valuations.
For Buffett’s right-hand man, Charlie Munger, the Paytm debacle only affirms his scepticism of losing money to making money. With Berkshire washing its hands, Paytm must rebuild trust in the public markets.
