Bill Pugliano / Getty

Warren Buffett loses $1 billion in 2 days after Kraft Heinz disappoints again


Warren Buffett lost more than $1 billion this week as Kraft Heinz stock plummeted 11% in two days.

The famed investor's Berkshire Hathaway conglomerate owns about 27% of the food giant, according to Bloomberg data. The value of its stake plunged to $8.7 billion from $9.8 billion over Thursday and Friday, as a one-two punch of disappointing earnings and a credit-rating cut pummeled Kraft Heinz shares.

On Thursday, the maker of Heinz ketchup and Kraft macaroni and cheese revealed a 5% drop in fourth-quarter net sales and a 14% slump in adjusted earnings per share. CEO Miguel Patricio described the performance as "disappointing" in a press release.

On Friday, Fitch cut Kraft Heinz's credit rating to BB+ from BBB-, downgrading its bonds to non-investment grade or "junk," Bloomberg reported. The credit-rating agency cited the company's large debt pile, dwindling profits, and negative outlook.

Kraft Heinz stock has nose-dived almost 75% from its peak in February 2017, underscoring the magnitude of Buffett's mistake.

The so-called Oracle of Omaha partnered with private-equity group 3G Capital to buy Heinz for about $28 billion on Valentine's Day in 2013. The pair then cofinanced Heinz's $50 billion mega-merger with Kraft Foods in 2015. Kraft-Heinz's market capitalization was less than $33 billion on Friday.

"We try to buy good businesses at a decent price, and we made a mistake on the Kraft part of Kraft Heinz," Buffett said at Berkshire's annual meeting last year. "We paid too much money."

Read more: Jeremy Grantham, the legendary investor who called the past 2 bubbles, hails venture capital as the best market for the highest returns — and pinpoints where he's buying now