Europe's richest man bought LVMH shares on a drawdown. Should we follow his example?

French billionaire Bernard Arnault began actively buying shares of the world's largest luxury holding LVMH after the publication of its late January disappointing investors and falling prices, writes Bloomberg. Arnault has already sent to buy securities more than € 400 million. In late January during the presentation of financial results of the holding businessman said that his family group wants to increase its stake in LVMH in 2026 to more than 50%.

LVMH shares fell 1.6% in Paris trading on Feb. 11, down 18% since the beginning of the year.

According to documents on the Paris Stock Exchange, starting January 28 - the very day after Arnault announced his intention to increase his stake in the luxury conglomerate to a controlling one - the French billionaire and Europe's richest man bought LVMH securities for about €100 million, Bloomberg noted. On this day, the holding's securities fell by 7.9% amid weak forecasts about LVMH's future, which caused the largest one-day loss of Arnault's personal fortune - about $15 billion, the agency notes.

But despite this, Arnault, according to stock exchange documents, continued to buy LVMH securities through holding structures. As a result, by February 4, the total volume of LVMH securities purchased by him reached about 757 thousand - for a total amount of about €407 million, the agency writes. On February 5, according to stock exchange documents, Arnault also purchased a little more than 98 thousand shares of LVMH at a price of €536.385 (on the stock exchange on that day the shares of the holding were traded in the range from €543 to €532.1). On February 4, the purchase was made at a price of €532.3966 (on the stock exchange, LVMH shares were trading between €537.7 and €527.5 on that day)

The new wave of purchases was preceded by a longer, eight-month period of active acquisition of shares last year, when Arnault also took advantage of the decline in LVMH quotes, recalls Bloomberg. However, this time, in contrast to last year's deals, the agency notes, the businessman indicated his intentions in advance during the announcement of the company's financial results. In particular, on January 27, Arnault said that he was not sure "whether observers will like it", but at a time when the luxury sector is facing serious difficulties, he himself seeks to increase his stake in the group he created to more than 50%.

"Our family group owns about 50% of LVMH's capital, and as the new year begins, we are entitled to acquire some more. This year, we will exceed the 50% threshold. We will own more than half of the share capital. We believe in what we do and we demonstrate it in this way," he said during the presentation of the company's financial results.

A spokesman for the Arnault family did not respond to Bloomberg inquiries about recent stock purchases.

According to the latest annual report, the Arnault family owned 49% of LVMH's share capital and 64.8% of voting rights at the end of 2024. Given that this already provides the billionaire with significant control over the company, it remains unclear why he needs to exceed the 50% threshold, Bloomberg notes.

"It may be symbolic in nature - a kind of cherry on the cake. It is also a way to show optimism," said AlphaValue analyst Frédéric Genevrier.

Of the 27 analysts covering LVMH securities, 14 advise to buy them, 12 - to keep in the portfolio and only one - to sell, according to the data Marketscreener. Average target price of analysts assumes growth of quotations of the holding by almost 20% relative to closing price on February 10.

Bernard Arnault's fortune is estimated at $181 billion against a record $231 billion in March 2024, according to the Bloomberg Billionaires Index. Although his net worth is higher than in 2022, when he topped the ranking, the rise in the fortunes of tech billionaires Elon Musk and Larry Page has dropped him to seventh place. His fortune is mainly due to his stake in LVMH rather than a broad diversification of assets, Bloomberg notes.

This article was AI-translated and verified by a human editor