Warren Buffett’s investment team exited General Motors (GM) shares in the third quarter of 2023, a move that appears to have contradicted the very long-term philosophy the conglomerate’s CEO espoused to GM leadership. Despite Buffett previously telling GM CEO Mary Barra that he wanted her to run the company for the long term rather than for quarterly earnings, Berkshire Hathaway sold its final 22 million shares, valued at roughly $850 million at the time. Since that exit, GM’s stock price has more than tripled to approximately $84, meaning the shares Berkshire sold would now be worth around $1.85 billion.

Market Context

Berkshire Hathaway began accumulating GM shares in 2012 at an average price of around $25 per share. The position peaked at 80 million shares by 2020, representing a stake worth approximately $4 billion. The conglomerate gradually reduced this position before completing the exit in Q3 2023. This period coincided with significant headwinds for the automaker, including a historic United Auto Workers (UAW) strike in September 2023 and slower-than-expected development of electric vehicle demand. GM shares hit a low in November 2023 before beginning their substantial recovery.

Analysis

The divergence between Buffett’s stated philosophy and Berkshire’s trading activity highlights the difficulty of maintaining conviction during periods of operational stress. GM CEO Mary Barra recalled Buffett’s advice as "phenomenal," noting he urged her to avoid running the company for the quarter to create true long-term value. However, Berkshire’s exit suggests the investment team prioritized risk mitigation during a volatile period characterized by labor disputes and uncertain EV adoption curves. Barra subsequently continued restructuring GM around its most profitable vehicles and implemented aggressive cost reductions. The market has since rewarded this strategy, with GM committing tens of billions of dollars to stock repurchases, including a completed $10 billion accelerated buyback and separate $6 billion authorizations in June 2024, February 2025, and January 2026.

Key Numbers

- Berkshire Hathaway sold its remaining 22 million GM shares in Q3 2023 for a reported value of approximately $850 million.

- GM shares have risen to approximately $84, more than tripling from their November 2023 low.

- The 22 million shares sold by Berkshire would be worth roughly $1.85 billion at current prices, representing a missed opportunity of approximately $1 billion.

- Berkshire’s initial average entry price in 2012 was approximately $25 per share.

- GM’s peak stake held by Berkshire was 80 million shares, valued at roughly $4 billion in 2020.

- GM approved $6 billion share repurchase authorizations in June 2024, February 2025, and January 2026.

What to Watch

Investors monitoring GM should focus on the execution of the recently approved $6 billion buyback authorizations and the company’s continued focus on high-margin vehicle segments. The success of these capital return programs will be critical in sustaining shareholder value after the recent rally. Additionally, market watchers should observe whether GM’s long-term strategy continues to align with the "run for the long term" philosophy Buffett advocated, even as short-term volatility in the EV sector persists.