Warren Buffett's Berkshire Hathaway Inc. cut its stake in Moody's Corp., the holding company for Moody's Investors Service Inc., by 2%, the second reduction in two months, amid profit declines and criticism of reports on mortgage-backed securities.
Berkshire, still the largest stockholder in the New York company, sold 794,388 shares Sept. 1 and Sept. 2, according to a regulatory filing last week.
Buffett's company, which cut its stake in Moody's by 17% in July, still holds 39.2 million shares. The stake sold was worth about $20.7 million, based on the closing price Sept. 2.
Moody's and its rival Standard & Poor's are under pressure as the economic downturn curbs demand for their ratings. The recession exposed weaknesses in structured securities that once received triple-A grades, prompting a lawsuit by investors that claim Moody's and S&P hid the risks of investments linked to subprime mortgages. Buffett has said Moody's damaged its brand as ratings proved inaccurate.
"He's seen a change in the prospects of the business," Jeff Matthews, the author of "Pilgrimage to Warren Buffett's Omaha," said in an interview.
"He's a very loyal shareholder. For him to sell the stock in something like Moody's, that's a big deal."