Berkshire Hathaway Sells Shares in DaVita as Stock Prices Drop

Traders were active on the floor of the New York Stock Exchange on February 13, 2025, responding to recent developments in the healthcare market. DaVita, a prominent provider of dialysis services, faced a significant decline in its stock prices on Friday. The company attributed this drop to its weaker-than-expected financial outlook, which comes amid rising operational costs.

The shares of DaVita fell by 8% in premarket trading on Friday. The company, based in Colorado, projected that its adjusted profit per share for 2025 would range between $10.20 and $11.30. This estimate fell short of analysts' average forecast of $11.24 per share, as reported by LSEG.

The disappointing guidance highlights the increasing costs associated with patient care. DaVita has been dealing with mounting expenses related to the closure of some of its dialysis centers. In the fourth quarter alone, the company recorded closure-related charges totaling $24.2 million, which pressured its financial outlook.

However, DaVita did report its fourth-quarter earnings, which came in at $2.24 per share on an adjusted basis, exceeding analysts' expectations of $2.13 per share according to LSEG.

Berkshire Hathaway's Stake Reduction

In a separate but related development, Berkshire Hathaway, which is DaVita's largest institutional investor, sold off 203,091 shares on Tuesday. This transaction reduced its ownership stake in the dialysis company to 45%, a reduction valued at nearly $6.4 billion, as indicated by a regulatory filing made public on Thursday evening.

This sale was part of a prearranged share repurchase program that was agreed upon back in April. Under this arrangement, DaVita had committed to buying back shares from Berkshire Hathaway to gradually lower Berkshire's stake to 45% on a quarterly basis.

Warren Buffett's investment conglomerate initially purchased shares in DaVita in 2011. By the end of September, DaVita accounted for Berkshire Hathaway’s 10th largest equity holding.

Berkshire, DaVita, Stocks