Domino’s Pizza Stake Purchased by Warren Buffett’s Berkshire Hathaway Group

Warren Buffett’s Berkshire Hathaway Group has purchased a huge stake in Domino’s Pizza, and the investor’s reasons for the purchase may be surprising.

As reported by Bezinga, Berkshire acquired 1.28 million Domino’s Pizza shares, valued at $550 million at the end of the third quarter, according to a recent filing with the Securities and Exchange Commission. Additionally, the holding firm purchased more than 400,000 shares of Pool Corp., the biggest distributor of pool materials and equipment in the United States.

Investors followed Buffett’s example, and shares of both firms surged on the announcement. The stock of Domino’s Pizza has increased by 20% in the last year and 8.5% so far this year. Despite a 9% year-to-date decline, Pool Corp. has had a small 3.5% annual rise.

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Domino’s has made an empire out of its well-known branding and effective delivery system. There’s a reason it’s the biggest pizza chain in the United States. Even though the company’s third-quarter results fell short of revenue projections, it nevertheless outperformed Wall Street’s predictions for profitability and resiliency. The stock was recently upgraded by analysts, including those at Loop Capital. They observe that same-store sales are increasing.

Domino’s Pizza Is at the Center of a Securities Fraud Lawsuit

Despite Buffett’s investment, Domino’s Pizza is still currently embroiled in a class-action securities fraud lawsuit.

On Sunday, Sept. 29, Bronstein, Gewirtz & Grossman, LLC sent out a press statement informing Domino’s (referred to as the “Defendants”) stockholders about the class action complaint.

The plaintiffs in this lawsuit are all people and businesses who purchased Domino’s stock in any way between Dec. 7, 2023, and July 17, 2024. The complaint seeks damages from the pizza giant for alleged violations of federal securities laws.

“Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects,” the press release states. “Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) DPE, the Company’s largest master franchisee, was experiencing significant challenges with respect to both new store openings and closures of existing stores; (2) as a result, Domino’s was unlikely to meet its own previously issued long-term guidance for annual global net store growth; (3) accordingly, Domino’s business and/or financial prospects were overstated; and (4) as a result, the Company’s public statements were materially false and misleading at all relevant times.”