Carl Icahn Out Of Occidental As Warren Buffett Doubles Down

For Occidental Petroleum Corporation OXY, it's one billionaire Wall Street legend in and another one out.

On Friday, new filings from Berkshire Hathaway Inc. (NYSE: BRK-A)(NYSE: BRK-B) revealed Warren Buffett has taken a sizable new position in the oil and gas giant. Just two days later, long-time activist investor Carl Icahn revealed to the Occidental board that he has sold his remaining stake in the company.

Buffett And Icahn: Icahn famously criticized Occidental for its $38 billion buyout of Anadarko Petroleum in May 2019. Buffett took his first stake in Occidental during that period, acquiring $10 billion in preferred stock and warrants to buy about 84 million in common stock as part of Occidental's fundraising process. Icahn also took exception to the terms of Buffett's investment.

Related Link: 10 Quotes That Show Warren Buffett's Lighter Side

Oil and gas stock prices plummeted during the COVID-19 outbreak in early 2020, and Icahn aggressively bought the dip, raising his stake to about 10% of the company. Soaring oil prices in the wake of Russia's invasion of Ukraine have pushed Occidental's stock price from under $10 in 2020 to above $58 per share on Monday morning.

One Buying, One Selling: Icahn reportedly took advantage of the surging share price to cash out of his position, informing the Occidental board that he sold his remaining shares on Sunday.

Buffett, on the other hand, reportedly purchased more than 60 million shares of Occidental from Wednesday to Friday of last week, bringing Berkshire's total common stock stake in Occidental up to 91.2million shares worth more than $5 billion.

Icahn reportedly earned more than $1 billion in profits from his Occidental shares and still holds 15 million warrants with unrealized profits of another $500 million.

Benzinga's Take: It's somewhat surprising to see Buffett's Berkshire buying so aggressively with oil prices at 13-year highs and Occidental's stock price also at multi-year highs. However, even after doubling so far in 2022, Occidental shares are still reasonably valued, priced at only about 15.7 times forward earnings.