Warren Buffett is selling off part of his stakes in two companies with strong monopoly positions: Sirius XM Holdings and VeriSign. The Oracle of Omaha has been a long-time investor in these businesses, but he’s decided to reduce his exposure due to concerns about their valuation.
Buffett has reduced Berkshire Hathaway’s stake in VeriSign by 32% after selling $1.23 billion worth of shares. He did this to bring the company’s stake from 14.2% to 9.6%, meeting regulatory requirements for holding more than 10% of a company’s outstanding shares.
Despite being a monopoly, Sirius XM Holdings has been a target for Buffett in recent months. The billionaire investor spent $106.5 million acquiring 5,030,425 shares of Sirius XM stock in July and August, increasing Berkshire Hathaway’s stake to over 37%. This move came after the company’s valuation was deemed “historically cheap” by Buffett.
However, VeriSign’s valuation is a different story. The internet infrastructure and domain-name registry services company has been valued at around 30 times forward-year earnings, making it one of the most expensive stocks in Berkshire Hathaway’s portfolio. Buffett seems to believe that this high valuation makes VeriSign a ” risk-versus-reward” opportunity with a negative outlook.
Historically, companies with premium valuations tend to underperform during stock market corrections. Given this trend and the current Shiller P/E Ratio, which has only surpassed 30 six times since January 1871, Buffett’s decision to sell off part of his VeriSign stake seems like a calculated move to minimize losses.
While Sirius XM Holdings remains an attractive investment opportunity for Berkshire Hathaway, VeriSign’s high valuation and potential risks have led Buffett to reevaluate his position. This move may signal a more cautious approach from the Oracle of Omaha as he navigates the current stock market landscape.
Source: https://www.fool.com/investing/2025/09/12/billionaire-warren-buffett-buy-legal-monopoly