Stuff.co.nz reported this morning that,
Billionaire investor Warren Buffett will step down as a director of Coca-Cola Company this year because of time constraints after 17 years on the board of the world's biggest soft-drink company.Buffett, 75, told Coca-Cola that he did not plan to seek reelection to the board that he has sat on since 1989, the beverage giant said.
The announcement brings to an end a controversial episode in Buffett's illustrious career, which saw him steer the company away from the acquisition of Quaker Oats, delaying Coke's entry into the lucrative sports drinks market.
Buffett's departure got a positive reaction from Wall Street. "On the whole it is a plus for Coca-Cola. Their board is stale," said Marc Heilweil, president of Spectrum Advisory Services in Atlanta, which owns about 130,000 shares of Coke.
When I read the headline this morning my heart kind of sank. I remember when some institutional owners in Coca-Cola were trying to mount a bid to vote the "Oracle of Omaha" off the board. I, however, being a true Coke fanatic and a follower of Buffett's, voted with the majority for the best-known shareowner. After reading the article and seeing he was the one responsible for Coke dropping their attempt to acquire Quaker Oats (which owns Gatorade), allowing Pepsico to acquire it and the number one sports drink, Gatorade, I thought the move was stupid. I had never understood why Coke would look at such a great investment, and then just walk away. One has to wonder if the Oracle has lost his touch.
Still, even though Pepsi had acquired all of Quaker's products, Coke still outsold Pepsico quarter after quarter; that is until the announcement of the figures for the most recent quarter. Pepsi may have lost the cola wars, but who cares? While Coca-Cola remains a beverage company, Pepsico has grown into a snack foods company that just happens to sell beverages, and as such is beginning to beat Coke in other markets, namely the sports drinks market. Maybe with poor judgments like those, it is time for him to retire and allow a fresher, younger voice to sit on the board.
I wish Mr. Buffett the best of luck, and I am sure we are going to continue to hear from him for many years to come.
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