Why does Warren Buffett say he hasn’t sold his Berkshire stake yet?

Warren Buffett sought to allay investors’ concerns about his upcoming retirement in a letter to shareholders on Monday.

Buffett, in a Thanksgiving letter that he said will become an annual tradition, said he plans to hold on to a “significant” number of Berkshire Class A shares until shareholders “develop the comfort” with new CEO Greg Appel that Buffett and his late business partner Charlie Munger “enjoyed.” Buffett on Monday converted 1,800 Class A shares — worth about $1.3 billion — into Class B shares, which were donated to four family-run foundations.

Buffett also said he plans to “accelerate the pace of making lifetime gifts” to his three children’s foundations, to which he has promised to donate his entire $150 billion fortune. He said the acceleration was intended to increase the likelihood that his children – aged 72, 70 and 67 – would be able to distribute his wealth “before they are replaced by alternative trustees”.

Buffett, who led Berkshire for 60 years, said in 2021 that Abel would succeed him as CEO. It was officially announced in May that the transition would take place at the end of this year.

Berkshire shares have fallen 7% since that announcement, while the S&P 500 has risen 20%. Analysts attributed the stock’s underperformance to the “Buffett premium,” which refers to the boost Berkshire stock gets from Buffett’s unparalleled reputation on Wall Street and beyond.

“The acceleration of my lifetime gifts to my children’s foundations in no way reflects any change in my views about Berkshire’s prospects,” Buffett wrote. He added: “I can’t think of a CEO, a management consultant, an academic, a member of government – you name it – who I would choose over Greg to handle your savings and mine.”