Warren Buffett's profits from a 2015 investment in Axalta Coating Systems have been fading fast.
Axalta, the maker of paint for autos, plunged as much as 11 per cent to US$28.18 (NZ$37.7) Thursday in New York, the biggest fall since its 2014 IPO. That compares with the US$28 price that Buffett's Berkshire Hathaway agreed to pay two years ago for 20 million shares, for a total of US$560 million (NZ$753m). His Omaha, Nebraska-based company acquired the stock from affiliates of Carlyle Group LP.
Axalta posted a second-quarter net loss of US$20.8m (NZ$27.9m), driven by a writedown of assets in Venezuela. Operating profit of 31 cents a share missed by 8 cents the average estimate of 17 analysts surveyed by Bloomberg.
The biggest surprise in the quarter was a drop in prices for paints used to refinish autos in North America, Ghansham Panjabi, an analyst at R.W. Baird & Co, said in a note. Companywide, prices fell an average of 2.4 per cent, Axalta said in a presentation. Higher raw material costs also contributed to narrower margins, the company said.
Berkshire was the largest investor in the coatings company as of Dec 31, with a stake of more than 9 per cent, according to a filing from Philadelphia-based Axalta.
Buffett didn't respond to a request for comment left with an assistant. A spokesman for Axalta didn't immediately return a message.
Axalta changed hands for $28.41 at 1:19 p.m. in New York, bringing its decline for the year to 4.5 per cent. The last time it closed for less than US$30 was in March.