Lee Enterprises Rises Sharply after Berkshire Hathaway Discloses Stake

After market close today, holding company Berkshire Hathaway (NYSE: BRK-A) released an amendment to its May 13-F filing, revealing a stake in newspaper company Lee Enterprises LEE. The reported stake was worth around $1.9 million at today's closing price, approximately 3.2% of Lee's outstanding shares. Investments by billionaire Warren Buffett's firm are often seen as a credible vote of confidence, with Berkshire trading a little more than 1200% higher than it did 20 years ago. The S&P 500 Index rose approximately 210% over this time frame. Today's release said Berkshire Hathaway was denied a request for confidential treatment of its stake in Lee Enterprises. Perhaps, Buffet was worried that prematurely releasing information about the stake might move Lee's share price upward before Berkshire had finished acquiring shares. Indeed, Lee enterprises traded more than 20% higher in after-hours following the release of information about Berkshire's stake. Lee Enterprises' collection of newspapers includes the Arizona Daily Sun, Santa Maria Times and St. Louis Post Dispatch. Berkshire Hathaway already purchased a stake in Lee Enterprises' debt in April. This followed Lee Enterprises' filing for chapter 11 bankruptcy last last year. Shares of Berkshire Hathaway traded close to flat in after hours, as the reported investment is small relative to Berkshire's approximate $196.8 billion market capitalization.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.