Summarizing David Sokol's Lubrizol Transaction

Tyler Durden's picture

For all those still confused about the David Sokol thought process on Lubrizol, Keith McCullough from HedgeEye summarizes it best:

  1. Buy it in my PA
  2. Pitch Buffett
  3. Meet w/ the CEO
  4. Pitch Buffett again
  5. Buffett buys it
  6. Profit

Any residual questions remaining: please refer to Buffett's later on the matter, as Berkshire will not answer anything else, or to anyone.

PS: great comment from a reader:

What people are missing is in plain sight:  Sokol bought the stock with a "free option" not available to the public.  If WB bit and bid for LZ, Sokol wins big (whether the likelihood was 5% or 50% does not matter), but if WB did not bite and passed, then Sokol would have non-public information that BRK would NOT be interested in LZ.  In the latter hypothetical, any sale of LZ shares would then be an insider trade.  A win/win situation for Sokol - last I checked, those are not available to the public.