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Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019.

Scott Morgan | Reuters

David Rolfe, a longtime Berkshire Hathaway shareholder and chief investment officer at Wedgewood Partners, is fed up with Warren Buffett.

Rolfe told clients in a letter he sold the firm’s stake in Berkshire after decades of being shareholders, noting his frustration with the conglomerate’s massive cash hoard, lackluster investments and what he thinks are missed investment opportunities by the Oracle of Omaha and his team during the current bull market.

Berkshire Hathaway shares have lagged the S&P 500 over the current bull run, which started March 2009. In that time, Berkshire’s Class A stock is up 323% while the broad index has gained 334%.

“Thumb-sucking has not cut the Heinz mustard during the Great Bull Market,” Rolfe wrote in the third-quarter letter to clients. “The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and [Vice Chairman Charlie] Munger.”

Not that Buffett will miss Rolfe much, the RiverPark/Wedgewood Fund owned 48,000 shares of the Berkshire B class of stock, amounting to about $10 million. And Rolfe’s performance throughout the bull market has not been the best, either. His fund’s annualized returns, net of fees, are 13.6% over the past 10 years through the second quarter, according to a factsheet found in the Wedgewood Partners website. In that time, the S&P 500 has posted an annualized return of 14.7%.

Berkshire’s cash pile swelled up to more than $120 billion by the end of the second quarter of 2019, a record for the company. In his annual letter to shareholders, Buffet said he wanted to make an “elephant-sized acquisition” but noted prices were “sky-high.” Rolfe thinks so much cash is a “considerable impediment of growth” for the company.

Rolfe also grew frustrated with some of Berkshire’s investments during the current bull market. He highlighted IBM and Kraft Heinz, among others.

Buffett revealed his $10.7 billion IBM stake in the fourth quarter of 2011. But by early 2018, he had sold the entire stake. In that time, IBM shares dropped more than 20%.

Kraft Heinz is another investment that hasn’t panned out for Berkshire, especially since 2018. The stock has lost about two-thirds of its value in that time.

These moves “do not inspire confidence that Buffett & Co. are still at the top of their game,” Rolfe said.

Buffett and Munger are 89 years old and 95 years old, respectively, and questions over who will succeed them have been percolating for years now. At the company’s annual shareholder meeting, Buffett said longtime executives Greg Abel and Ajit Jain could one day join him and Munger on stage to answer questions, hinting at Abel and Jain’s succession potential.

Rolfe also noted Berkshire missed two major opportunities at the start of the bull market by not investing big in credit-card companies Mastercard and Visa. During the bull market, Mastercard has surged more than 1,800% while Visa is up over 1,300%. Berkshire has stakes in both companies, but they make up a tiny portion of the company’s equities portfolio.

“These two stocks should have been layups for Buffett,” Rolfe said.

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US-China trade deal mood is pessimistic in Beijing, according to government source

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The mood in Beijing about a trade deal is pessimistic due to President Donald Trump’s reluctance to roll back tariffs, which China believed the U.S. had agreed to, a government source told CNBC’s Eunice Yoon.

Stocks opened down on the trade headlines.

The U.S. and China agreed to work on a limited “phase one” trade deal in early October. China has pushed for a removal of the additional duties imposed on each other’s products in different phases, as part of the deal. Chinese Commerce Ministry spokesperson Gao Feng said earlier this month that the two sides had reached an agreement on the tariff rollback.

However, Trump said a week ago that he has not agreed to scrap tariffs on Chinese goods, contradicting the signal from China and dampening hopes about a coming resolution to a jarring trade conflict.

The Chinese are looking carefully at the political situation in the U.S. including the impeachment hearings and the presidential election, the source said, adding the officials are wondering if it is more rational to wait things out since it is unclear what Trump’s standing will be even in a few months.

There is disagreement over issues such as a specific number of agricultural purchases, the source said. The Chinese are resisting because, in part, they could risk alienating other trading partners, the source told CNBC.

The trade war between the world’s two largest economies has dragged on for nearly two years. The Trump administration has slapped tariffs on more than $500 billion in Chinese goods, while Beijing has put duties on about $110 billion in American products.

Trump hopes to resolve outstanding gripes with Beijing’s trade practices, including forced technology transfers and intellectual property theft, while securing more Chinese purchases of U.S. agricultural goods.

The White House did not immediately respond to CNBC’s request for comment.

The Chinese Ministry of Commerce said Sunday that the two sides had “constructive discussions” about “each other’s core concerns” and agreed to remain in close contact. Meanwhile, White House economic advisor Larry Kudlow said Friday that the two countries were “getting close” to reaching a trade deal.

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Mike Sievert to succeed John Legere as CEO of T-Mobile on May 1, 2020

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T-Mobile President and COO Mike Sievert will succeed John Legere as CEO on May 1, 2020, the company announced Monday.

Shares of T-Mobile were up slightly in afternoon trading after opening down 1.5%.

Sievert has been the heir apparent as Legere was expected to step down as CEO once T-Mobile’s merger with Sprint is completed. Legere’s contract ends on April 30, 2020, according to the announcement. Leger tweeted Monday that the decision “has been under development for a long time.”

CNBC’s David Faber reported in July that Sievert was expected to take over as CEO once the deal closes. The $26 billion merger has cleared key hurdles on the federal level but still faces a legal challenge from a team of state attorneys general seeking to block the deal. The case will go to trial next month.

When T-Mobile and Sprint first announced their intention to merge in April 2018, the companies said Legere would lead the combined business as CEO, with Sievert continuing to serve as President and COO.

Legere’s next move is still not known. CNBC and The Wall Street Journal reported last week that WeWork had spoken to him about taking over as CEO following Adam Neumann’s ouster. But CNBC later reported that Legere is not taking the job, according to people familiar with the matter. On a conference call Monday, Legere denied that he was ever in talks to be the WeWork CEO.

Legere was named T-Mobile’s CEO in 2012 and made a number of aggressive moves to increase the company’s wireless subscribers as it faced steep competition from its larger rivals, AT&T and Verizon. As other carriers pushed customers to sign up for wireless plans with data caps, Legere created unlimited wireless plans for T-Mobile and offered to pay termination fees for customers who switched over. Eventually, the rest of the industry followed suit and offered unlimited plans as well.

Legere was also responsible for bringing the iPhone to T-Mobile for the first time. And he went through multiple merger talks with Sprint over the years before finally locking the deal down in April 2018. The company expects to complete the merger next year.

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Intelsat stock drops as FCC will auction satellite spectrum for 5G

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Ajit Pai

Brad Quick | CNBC

The Federal Communications Commission (FCC) announced on Monday that it will publicly auction off a valuable telecommunications asset, in a move investors viewed as a blow to U.S. satellite communications provider Intelsat.

Shares of Intelsat dropped more than 40% in heavy trading volume after FCC Chairman Ajit Pai said in a tweet that his agency “must free up significant spectrum” for 5G telecommunications. The FCC told CNBC that it expects an auction to happen “before the end of 2020.”

“I’ve concluded that the best way to advance these principles is through a public auction of 280 megahertz of the C-band,” Pai said. “I’m confident they’ll quickly conduct a public auction that will give everyone a fair chance to compete.”

C-band spectrum is a key telecommunications wavelength the FCC regulators. Four satellite operators, including Intelsat, provide C-band services in the U.S. to about 120 million households. The FCC wants to repurpose the C-band spectrum for 5G and an auction is expected to raise tens of billions of dollars. But a public auction would see the proceeds go to the government, an option the satellite operators – organized as the C-Band Alliance – have opposed.

“The fundamental issue here is that there’s the ideal and there’s the practical. Everyone recognizes the best use of this spectrum is for 5G services – but what is the most economical and timely way to do that?” Chris Quilty, president of satellite financial services firm Quilty Analytics, told CNBC. Quilty formerly led Raymond James’ coverage of sattellite communications and the broader space industry for 20 years.

The C-Band Alliance have been pushing for a private auction. The group on Friday gave a proposal to the FCC where the satellite operators would keep some of the proceeds while paying taxes on the sale, as well as contributing at least $8 billion to the U.S. Treasury and possible helping fund a rural 5G network.

“The private auction would generate billions in proceeds for Intelsat and the other C-band operators,” Quilty said. “The potential C-band proceeds gave Intelsat a path for deleveraging, which has otherwise escaped the company for the past 10 years.”

Intelsat had a market value of about $1.8 billion before trading began on Monday. Even before the latest drop, Intelsat’s stock had dropped more than 10% on three consecutive trading days as the tide shifted against the C-Band Alliance. The FCC’s announcement of a public auction means the satellite companies may not recoup the value of their C-Band investments, such as the expensive satellites.

“What we’ll likely see happen, which is the worst case scenario, is that the satellite operators have every incentive to drag their heels and take this to the courts, because they’re no longer being compensated for this spectrum,” Quilty said. “People are assuming they’re still going to get something but they’re not going to get the $8 billion to $10 billion windfall they were expecting.”

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