On Friday local time, Warren Buffett's Berkshire Hathaway cleared all of its shares in Paytm India through bulk trading. According to statistics, after holding a position for five years, this transaction caused nearly 40% of Berkshire's losses.
In 2018, Buffett's subsidiary invested approximately $260 million in Paytm and acquired a 3% stake in this financial services startup at a valuation of approximately $10 billion.
Paytm, known by the market as "Alipay" in India, was founded in 2010 and is the largest payment platform in India. At present, it has more than 300 million registered users, equivalent to half of the number of Internet users in India. The number of merchants on the platform exceeds 20 million. At present, Paytm has developed into a comprehensive financial service platform that covers digital payments, insurance, credit and other businesses.
According to data from local stock exchanges in India, during Paytm's IPO in 2021, Berkshire took the opportunity to sell 1.4 million shares (worth $36 million) of stock.
On Friday, Berkshire sold over 15.6 million shares of the digital payment company's stock at a weighted average price of 877.29 rupees per share, valued at approximately $121.6 million. That is to say, Berkshire's $260 million investment in Paytm ultimately resulted in a return of less than $160 million.
Paytm was Berkshire Hathaway's first direct venture capital investment in India and was widely welcomed by Indian venture capital firms at the time. In addition, SoftBank Group of Japan and Chinese technology giant Alibaba were both early investors in Paytm.
However, since Paytm went public, the stock price has plummeted all the way, and after more than a year of rebound, it is still in a burst state.
Before Berkshire recognized its losses and was eliminated, SoftBank and Alibaba sold off the company's stocks significantly, which can be said that these giants have all crashed into the Indian market.
In September this year, Paytm CEO Vijay Shekhar Sharma expressed his willingness to increase his stake in Paytm. A few weeks ago, he purchased shares of Paytm from Ant Group and became the largest single shareholder of Paytm.