Apple Shares Decline After Berkshire Sold Half Its Stocks With iPhone Maker

Berkshire Hathaway sold approximately half of its shares in Apple, triggering a Monday selloff that saw its stock drop nearly 5% in U.S. markets.

Bloomberg reported that some of the suppliers of Apple, particularly those located mostly in Asia, saw their shares fall significantly subsequent to Berkshire's sale of its shares.

Hon Hai Precision Industry Co. and Taiwan Semiconductor Manufacturing Co., both listed in Taipei, each saw a 10% decline. Both these companies are assemblers of the iPhone.

In the case of suppliers of its components, the companies also saw a sharp decline in their shares. Tokyo-based Murata Manufacturing Co. slipped by 15%, Korea's LG Innotek Co. fell as much as 13%, and China's Luxshare Precision Industry Co. fell 7.7%.

The decision of Warren Buffett's company to sell approximately $75.5 billion of shares in Apple in the second quarter was viewed as the driving force behind the decline in the shares of Apple's suppliers.

After the sale, Buffett saw a whopping cash reserve increase, amounting to $276.9 billion. The move left many in Wall Street wondering about the motivation behind it.

Mike O'Rourke, the chief market strategist at Jonestrading, said that the actions of Berkshire could not be dismissed, as anything other than that which is negative for the market, Stock Invest noted.

"It should be hard for anyone to argue that this is not a market negative," Rourke added.

Analysts have expected that Berkshire would continue the path that it started with Apple. However, the scale on how it reduced its Apple shares took many by surprise!