Subject: [NEXTEL-1] Buffett has invested at least $320 mln in Nextel

From: [email-masked]
Date: Sat, 30 Aug 2003 13:05:48 -0400

Buffett has invested at least $320 mln in Nextel
August 29, 2003 6:20:00 PM ET

By Philip Klein 

NEW YORK, Aug 29 (Reuters) - Berkshire Hathaway Inc. (BRKa), the 
holding company run by billionaire Warren Buffett, bought at least 
$320 million worth of bonds and preferred stock in Nextel 
Communications Inc. (NXTL) since the beginning of 2002, filings with 
insurance regulators show. 

The purchases are among several investments in telecommunications 
companies over the past year by Buffett, the widely acclaimed 
investor who famously shunned technology stocks during the late 1990s 
boom. Buffett has also recently invested in WilTel Communications 
Inc. (WTEL) and Level 3 Communications Inc. (LVLT). 

Specifically, Berkshire subsidiary General Reinsurance Corp. bought 
$155.6 million of bonds and preferred stock in Reston, Virginia-based 
Nextel, while another Berkshire insurance unit, GEICO, acquired 
$164.3 million in Nextel securities. 

Information about the purchases -- which occurred between Jan. 1 2002 
and June 26, 2003 -- was obtained from the National Association of 
Insurance Commissioners . 

Shares of Nextel jumped 7 percent on the Nasdaq on Friday, closing up 
$1.27 at $19.33 per share on the news that Buffett had put money into 
the company. A rise in stock price often occurs when Buffett's 
holdings in a company are revealed, given his tremendous clout with 
investors. 

A Nextel spokeswoman declined to comment and a Berkshire 
representative was not available. 

The investment in Nextel is not a very risky move by Buffett, 
according to analysts. 

"The Nextel investments are very conservative investments with juicy 
income," Guzman & Co. wireless analyst Patrick Comack said. "His 
Level 3 and WilTel investments are more speculative in my opinion. 
This (Nextel investment) is more in line with Buffet's conservative 
approach of value." 

Nextel has been bucking a slowdown in the wireless phone industry 
thanks to the popularity of the feature on its mobile phones that 
allows them to function much like a walkie-talkie. 

Buffett built a fortune investing in old economy businesses such as 
Coca-Cola Co. (KO) & Gillette Co. (G) and said he avoided making 
investments in complex industries such as technology that he did not 
understand. 

But in the past year, he has gone bargain hunting in the 
telecommunications and energy sectors, taking advantage of downturns 
that depressed prices. 

In addition to insurance operations such as GEICO, Omaha, Nebraska-
based Berkshire owns dozens of businesses -- such as Dairy Queen, 
Benjamin Moore and Fruit of the Loom -- that pump cash into the 
company for Buffett to invest.

http://www.forbes.com/work/careers/newswire/2003/08/29/rtr1069991.html

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