New York: Berkshire Hathaway Chairman and CEO Warren Buffett said in a letter to shareholders on Tuesday that he has been diagnosed with stage 1 prostate cancer and would start radiation therapy.
The 81-year-old billionaire investor kept his chin up, stressing that "the good news" is that doctors have indicated his condition isn't "remotely life-threatening or even debilitating in any meaningful way." He will begin a two-month treatment in mid-July consisting of daily radiation therapy. Buffett went on to say he would let shareholders know should his health change. "Eventually, of course, it will; but I believe that day is a long way off," he said. (Read Buffett's letter to shareholders here.)
Buffett's openness on this matter with shareholders contrasted with the more private handling of late Steve Jobs' illness.
"I received my diagnosis last Wednesday. I then had a CAT scan and a bone scan on Thursday, followed by an MRI today. These tests showed no incidence of cancer elsewhere in my body," wrote Buffett in his letter.
"I discovered the cancer because my PSA level (an indicator my doctors had regularly checked for many years) recently jumped beyond its normal elevation and a biopsy seemed warranted," added the legendary investor.
The markets reacted immediately to the news with shares of Berkshire A falling 1.2 percent on Tuesday. B shares slumped 1.7 percent.
Reams of newspaper have been spent on guessing who will succeed Warren Buffett as chief executive of Berkshire Hathway. In a February interview with CNBC, Buffett said Berkshire's board had chosen his successor, but that the individual was not aware he had been chosen as the next CEO of the company. On Tuesday, Buffett said nothing had changed and the chosen successor was still unaware of the board's decision.
There has been speculation that the front-runner is Ajit Jain, who runs Berkshire's biggest and highly profitable reinsurance business, though it is unclear if Jain wants the job, reported The Wall Street Journal. Jain was born in India and worked for IBM and McKinsey & Co before joining Berkshire in 1986.
Jain's team is known for embracing risks, others in the insurance business have dodged. After the September 11 terrorist attacks, Jain's group boldly wrote about $1 billion in insurance policies for several large airlines against potential losses from terrorist attacks.
Other senior executives who are thought to be leading candidates to replace Buffett include Tad Montross, chief of the insurance business; and Matthew Rose at the railroad unit Burlington Northern Santa Fe. Buffett has already added hedge fund manager's Todd Combs and Ted Weschler to Berkshire's ranks to help and succeed him in managing the firm's investment portfolio.
Buffett also intends for his 56-year-old corn and soybean farmer son Howard to take on the role of non-executive chairman, an unpaid position. Buffett told reporters his son would serve as a "guardian" of the company's "values" rather than a CEO, as long as the company's board approves.
Commentators were divided on what the news of Buffett's cancer means for the company he heads. "The succession at Berkshire Hathaway has often been compared to that of Apple, another company with an iconic founder, in Steve Jobs, that many viewed as inextricable from the company's value,"observedForbesmagazine. "Jobs had a more dire diagnosis and took multiple leaves before his passing in 2011, but it will be years before Apple runs out of products to sell that he had a hand in developing.
"When Buffett leaves Berkshire, whenever that may be, his investing acumen - and the seal of approval he grants the companies he invests in - leaves with him," addedForbes.
But Jeff Matthews, a Berkshire investor and author of Secrets in Plain Sight: Business and Investing Secrets of Warren Buffettold Chicago Tribune that the cancer news should mean nothing stock-wise.
"I think it means zero for Berkshire investors. He's been getting the company ready for the day he dies: moving from stocks into companies and thereby building a conglomerate out of a stock portfolio; identifying a CEO successor with Board approval; hiring two hedge fund managers to eventually take over the investment side; merging Wesco into Berkshire," Mathews told the Chicago Tribune.
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Updated Date: Dec 20, 2014 17:24:48 IST