After taking over from Buffett, Abel's first shareholder letter failed to boost market confidence, putting pressure on Berkshire (BRK.A.US, BRK.B.US) stock prices.

Berkshire Hathaway (BRK.A.US, BRK.B.US) announced its fourth-quarter performance and the first letter to shareholders from CEO Abel after taking office, causing the stock price to plummet on Monday, with a tepid market response. Berkshire Hathaway Class A shares fell about 4.9% to $720,000, while Class B shares dropped 4.91% to $480.17. The financial report shows that the company's operating profit in the fourth quarter fell by 30% year-on-year. Even after adjusting for one-time factors such as exchange rate fluctuations and some impairment of goodwill, the adjusted operating profit still decreased by nearly 20%. Insurance underwriting profit plummeted by over 50% year-on-year, and the company also hinted that the environment for its core property and casualty insurance business is becoming more challenging. Due to the performance impact, KBW analyst Meyer Shields lowered profit forecasts for 2026 and 2027 to $30,610 and $32,290 per Class A share respectively, down by about 5% and 4% from previous expectations, while maintaining an "underperform" rating and a target price of $695,000. Although Abel candidly discussed the company's core operations in the shareholder letter and promised to continue the corporate culture built by Buffett over 60 years, which won recognition from some long-term investors, there has been no change in the capital allocation policy. The company has not repurchased shares since May 2024, and did not engage in buybacks in the fourth quarter of 2025 and in January 2026. Abel also stated that there are currently no plans for dividends. This means that Berkshire Hathaway's record $373 billion cash reserve could continue to grow unless stock prices significantly decline or major mergers and acquisitions opportunities emerge. In early January this year, the company spent about $9.5 billion to acquire the chemical business of Occidental Petroleum Corporation. Regarding dividends, Abel stated that retaining profits creates higher long-term value for shareholders than distributing dividends. Some investors had hoped that the new CEO would be more proactive in returning value to shareholders, such as proposing a $50 billion buyback program, but such measures have not materialized. Currently, about $127 billion in cash is held in the parent company, which can be used more flexibly for buybacks or dividends, while most of the remaining cash is held in insurance subsidiaries, where regulatory constraints are greater. In addition, the approximately $1.6 billion impairment of goodwill in the fourth quarter financial report was not clearly disclosed in the news release, but was hidden in the appendix of the 10-K report, causing confusion among some investors. Abel did not hold a conference call on the financial report, and stated that he will continue Buffett's tradition of "not holding quarterly earnings calls", believing that this is more consistent with the company's long-term investment philosophy. Analysts point out that in the context of weak revenue growth, subdued profit prospects, and ineffective allocation of massive cash reserves, Berkshire Hathaway may find it difficult to achieve a higher market premium in the short term. According to current market expectations, the company's operating profit this year may see almost no growth.