Warren Buffett’s Berkshire Hathaway Is Betting Nearly $1 Billion on Bending Spoons

Berkshire’s investment terms

Berkshire Hathaway will buy 10 million Bending Spoons shares at $33 each, a roughly 13% discount to the company’s $38 closing price on Tuesday, before the deal was announced. The agreement adds $330 million to Berkshire’s $600 million investment made when Bending Spoons went public in July.

Together, those investments give Berkshire a 4% stake in the Italian tech company. Neither company responded to Business Insider’s requests for comment.

A strategy of buying businesses

Bending Spoons acquires digital businesses, seeks to improve their operations and profits, then uses the earnings to fund further acquisitions. It has followed this approach for more than a decade and has not sold a material business.

Its acquisitions include AOL, Evernote, Vimeo, Eventbrite and WeTransfer. The company says its transformations can involve reorganizing teams, changing technology and interfaces, speeding product development, and improving marketing and monetization, sometimes with AI.

One account in the article describes a business with about 350 employees when Bending Spoons acquired it in early 2023. Staffing fell to roughly 60 within 12 to 18 months and the business is now run by around 20 people; the account does not identify the speaker or business.

Growth and valuation questions

Bending Spoons’ revenue rose 126% year over year to $704 million in the second quarter, while adjusted operating income increased 150% to $381 million. Despite that growth, the article says few would regard the stock as cheap on fundamental measures.

The investment also differs from Warren Buffett’s traditional preferences. Buffett has favored bargains with a margin of safety and investments within his circle of competence, while technology companies can have high valuations, uncertain prospects and complex products.

Long-term ownership and succession

Berkshire and Bending Spoons both buy businesses with the intention of holding them for the long term, rather than selling them on. Berkshire’s largely autonomous portfolio includes GEICO, Duracell, Fruit of the Loom, Pilot Travel Centers and BNSF Railway; Bending Spoons describes itself as a permanent owner, too.

Berkshire has a market capitalization of $1.1 trillion and held $365 billion in cash at the end of June. Its largest stock position was worth about $66 billion at that time, making the Bending Spoons investment relatively small for the company.

The deal may reflect an evolution in Berkshire’s investing after Buffett’s departure as CEO and chairman. Berkshire has not said whether Buffett took part; the investment’s size could point to remaining investment manager Ted Weschler, but responsibility has not been confirmed.