The Counterfactual

The record

1. 2015

   Berkshire Hathaway

   Held

   Whether to merge Heinz with Kraft Foods Group and fund the cash payout to Kraft shareholders

   • Merge Heinz with Kraft — Bolt Kraft onto Heinz and fund the special dividendchose this
   • Keep Heinz standalone — Retain the tight, branded, cash-generating Heinz business alone

   Stated reasonThe price for Kraft assumed its earnings power was something it was not, resting almost entirely on goodwill

   Committedan additional $10 billion (Berkshire and 3G together funded the $10 billion special dividend to Kraft shareholders.)

   What happened

   • 2018 goodwill impairment / net loss: goodwill impairment charge of $15.4 billion, net loss of about $12.6 billion, stock down more than 27% in a day
   • 2019-02 Berkshire's own write-down: Berkshire recorded a $3 billion write-down on its investment
   • 2021-09-03 SEC charge and penalty: SEC charged Kraft Heinz over ~300 improper transactions inflating EBITDA; settled for a $62 million civil penalty
   Read the full analysis →
2. 2018

   Bayer

   Held

   Whether to close the Monsanto acquisition despite the known glyphosate carcinogen classification and pending litigation

   • Close the Monsanto deal — Pay $128/share and absorb the known litigation liabilitychose this
   • Walk away — Pay the break-up cost and keep the existing company

   Stated reasonBayer made a bet on agriculture and described its due diligence as exhaustive, appropriate and thorough

   Committedroughly $63 billion (Equity paid at $128/share including Monsanto's debt)

   What happened

   • 2019 shareholder confidence vote: 55.5% of shareholders voted against ratifying management's actions at the 2019 AGM
   • 2020-06-24 Roundup litigation settlement: Bayer announced $10.1 billion–$10.9 billion to resolve Roundup litigation
   • 2026-02 litigation provisions: Bayer increased litigation provisions and liabilities from 7.8 billion euros to 11.8 billion euros
   Read the full analysis →
3. 2020

   Nike

   Reversed

   Whether to pivot to direct-to-consumer and exit wholesale partners

   • Pivot to DTC — Sell direct through own stores, app, and site while exiting wholesale partnerschose this
   • Keep wholesale shelf — Preserve wholesale partnerships as the discovery surface

   Stated reasonCut out the middleman, capture full margin, own customer data, and control the brand

   What happened

   • 2021 Retail partners exited: exited about 50% of its retail partners
   • 2025 Full-year revenue: revenue fell to $46.3 billion, down 10% reported
   • 2024-03 CEO acknowledgment of strategy flaw: CEO admitted the company needed to make 'important adjustments' and to 'lean in with our wholesale partners'
   Read the full analysis →
4. 2020

   Walgreens

   Reversed

   How to spend the one big bet meant to hedge the decaying drugstore business

   • Buy a profitable insurer — Acquire an established managed-care business adjacent to pharmacy
   • Build a clinic business — Take majority control of a not-yet-profitable primary-care operatorchose this

   Stated reasonTo bolt doctor's offices onto drugstores so patients could see a physician and fill prescriptions under one roof

   Committed$1 billion (The 2020 VillageMD investment at the fork; the further $5.2 billion in 2021 was a later commitment.)

   What happened

   • 2023 U.S. Healthcare division operating losses: $1.73 billion in operating losses
   • 2024 VillageMD goodwill impairment: $12.4 billion non-cash goodwill impairment, $5.8 billion attributable to shareholders, near-$6 billion quarterly net loss
   • 2024 Clinic closures and market exits: planning to shutter 160 VillageMD clinics and exiting several markets
   Read the full analysis →
5. 2022

   Microsoft

   Held in part

   Whether Microsoft should acquire Activision Blizzard at $95.00 a share during the post-scandal crisis window

   • Buy at $95 all-cash — Acquire the whole company at a fixed all-cash price during the scandal windowchose this
   • Walk away — Decline to acquire and never get the chance at a healthy-price premium

   Stated reasonAn opportunistic crisis-window purchase at a de facto pre-scandal price, a generous premium to the depressed stock but a discount to its peak

   Committed$68.7 billion (All-cash transaction value at announcement, inclusive of Activision Blizzard's net cash; the final outlay at the 2023 close was higher.)

   What happened

   • 2023-08-21 Cloud streaming rights: Microsoft transferred 15 years of cloud streaming rights to Ubisoft to satisfy the UK CMA
   • 2023-10-13 Deal close: The acquisition completed at more than $75 billion after 20 months
   • 2024 Xbox content and services revenue: Jumped 50% in the fiscal year after the close
   Read the full analysis →
6. 1985

   Apple

   Held in part

   Should Apple license Mac technology to other hardware makers or keep the platform closed?

   • License the Mac OS — License Mac technology to 3-5 major hardware manufacturers
   • Keep the platform closed — Sell Apple hardware only and protect the marginchose this

   Stated reasonLicensing the OS would surrender Apple's hardware margins, which ran above 55%

   What happened

   • 1997 clone sales going to existing customer base: 'somewhere around 99 percent' of clone sales went to the existing customer base
   • 1997 Mac OS computer sales: the total number of Mac OS computers sold had declined by almost 20% over the prior two years
   • 1997-09 acquisition of Power Computing assets: Apple bought Power Computing's core assets for $100 million in Apple stock in September 1997
   Read the full analysis →
7. 1993

   Berkshire Hathaway

   Held

   Whether to buy Dexter Shoe with Berkshire stock or cash

   • Pay in Berkshire stock — Hand over 25,203 Class A shares to acquire Dexterchose this
   • Pay in cash — Buy Dexter with cash, capping downside at the price paid

   Stated reasonBuffett believed Dexter was one of the best-managed companies he had seen

   Committed25,203 Class A shares worth $433 million (Paid in Berkshire stock, not cash)

   What happened

   • 2007 cost to shareholders of the Dexter deal: $3.5 billion
   • 2014 value of the surrendered shares: about $5.7 billion
   • 2024 value of the 25,203 shares: approximately $14.4 billion
   Read the full analysis →
8. 2002

   Milton Hershey School Trust

   Reversed

   Whether the Milton Hershey School Trust should sell Hershey to diversify its concentrated holdings

   • Sell the company — Convert the concentrated chocolate stake into diversified cashchose this
   • Keep Hershey concentrated — Retain the single-stock endowment and reject a sale

   Stated reasonTo diversify a fortune dangerously concentrated in a single chocolate stock, the prudent fiduciary move

   What happened

   • 2002-09 Sale process status: Hershey's board formally terminated the sale process
   • 2002-08-23 Court intervention: Orphans' Court granted a preliminary injunction barring the Trust from any sale agreement
   • 2002 Trustee removals: Seven trustees who voted to sell were removed; ten of seventeen ultimately forced out
   Read the full analysis →
9. 2004

   Sony

   Held

   Should Sony build open digital players or lock them down to protect its music catalog?

   • Lock down to protect catalog — Ship proprietary formats with DRM to protect the record label's music.chose this
   • Build open MP3 player — Build the open, friction-light player its engineers wanted, like the iPod.

   Stated reasonTo protect the music catalog by making sure the music could not be copied, moved, or set free.

   What happened

   • 2011-03 MiniDisc units sold: roughly 22 million units worldwide
   • 2008-03-31 Sony Connect store: store went dark on 31 March 2008, conceded a marketplace flop
   • 2008 Apple MP3 market share: about 48% of the market
   Read the full analysis →
10. 2005

    eBay

    Reversed

    Where eBay should allocate its capital and attention: buying Skype versus defending its own marketplace advantages

    • Acquire Skype — Buy the internet phone company on a buyer-seller voice-chat theory.chose this
    • Defend payment rail and auction — Pour capital into PayPal and the auction format eBay already owned.

    Stated reasoneBay believed buyers and sellers would want to talk before they traded

    Committedabout $2.6 billion in cash and stock (plus another $1.5 billion in earn-outs)

    What happened

    • 2007 Skype impairment: eBay wrote down $1.4 billion of Skype
    • 2009 Skype divestiture: eBay sold 65% of Skype at a valuation of $2.75 billion, below what it had paid
    • 2008 enterprise value overtaking: Amazon's enterprise value outgrew eBay's
    Read the full analysis →
11. 2006

    AMD

    Held

    After buying ATI's GPUs, whether to fund a general-purpose GPU software platform

    • Buy GPU silicon only — Acquire ATI's hardware and patents without a software layerchose this
    • Fund GPU software platform — Build a CUDA-equivalent programmable-GPU software layer on the new silicon

    Stated reasonAMD stated it lacked the financial resources to compete on such a large scale, and after the acquisition spent its capital servicing debt and untangling from its factories.

    Committed$5.61 billion (total ATI purchase price including transaction costs; AMD borrowed $2.5 billion under a term loan)

    What happened

    • 2026 Data-center AI GPU market share: Nvidia holds an estimated 85% of the data-center AI GPU market
    • 2026 GPU software platform launch timing: AMD's ROCm did not launch until 2016, a decade behind CUDA, and still trails
    • 2025 Discrete GPU market leadership: AMD's FY2025 filing concedes Nvidia is the share leader and claims leadership only in semi-custom game consoles
    Read the full analysis →
12. 2008

    AMD

    Held in part

    Whether AMD should sell its fabs and become a fabless chip designer amid near-insolvency

    • Sell fabs, go fabless — Spin off factories to Abu Dhabi's fund and take on a supply contractchose this
    • Keep owning fabs — Retain manufacturing assets and their crushing capital costs

    Stated reasonA near-insolvent company sold its most valuable physical assets for a balance-sheet reprieve and debt relief

    What happened

    • 2009-11-11 Patent overhang resolved: Reconciliation Event cleared when AMD and Intel reached their comprehensive settlement
    • 2010 One-time gain: AMD booked a $325 million one-time gain when it deconsolidated GlobalFoundries
    • 2012 Exit from exclusivity: AMD paid $703 million to escape the Wafer Supply Agreement exclusivity
    Read the full analysis →