Warren Buffett Sells Some Chevron Stock Amid Negative Sentiment

Chevron stock has been making headlines lately, and not necessarily for all the right reasons. Warren Buffett, one of the most famous investors in the world, recently reduced Berkshire Hathaway’s stake in Chevron by 3 million shares. This move comes at a time when other investors are also betting against the oil giant, with Chevron topping the list of most-shorted large-cap U.S. stocks according to data company Hazeltree.

While Chevron may not draw short sellers in the same way as some smaller, more controversial stocks, there is still a significant amount of negative sentiment surrounding the company. Despite this, Chevron has performed relatively well operationally, beating earnings estimates and overcoming production issues from last year.

One of Chevron’s biggest challenges at the moment is related to an acquisition. The company agreed to buy Hess for $53 billion in a deal that expands its presence in the U.S. and gives it a stake in a massive offshore project in Guyana. However, Exxon, which is leading the Guyana project, is now appealing Chevron’s deal with the International Chamber of Commerce in Paris, citing a right of first refusal over Hess’ stake. This dispute could leave Chevron shareholders with significant uncertainty for several months.

In response to these challenges, Chevron remains confident that the Hess deal will close successfully. The company has had positive conversations with many shareholders who are supportive of the transaction and anticipates completing the FTC review process by mid-year.

Despite the negative sentiment surrounding Chevron stock, it’s important to remember that Berkshire Hathaway has done very well on its investment in the company, with shares trading around $160 today, up 91% since the start of 2021. While there may be challenges ahead, Chevron’s operational performance and strategic acquisitions suggest that there may still be potential for growth in the future.