Tesco's share price has fallen nearly 50%, a huge mistake by the Sage of Omaha, Warren Buffett

Tesco's share price has fallen nearly by 50% reducing the value of investment by 50%.

The Sage of Omaha has said that his decision to invest in Tesco is a "huge mistake."
Berkshire Hathaway firm owns a 3.7% stake in Tesco, worth hundreds of millions of dollars and now  the supermarket's sales are declining and in addition to that share price has fallen to an 11-year low this year.
Tesco shocked investors last week by issuing a string of profit warnings. It revealed it had overstated its expected half-year profits by £250m.

The chairman of the Parliamentary Business Committee, Adrian Bailey, has described Tesco's error as "stratospheric".

He told on CNBC,"I made a mistake on Tesco. That was a huge mistake by me."

Mr Buffett is famous for comprehensive ability to understand the performance of a business for long period of time but now it does not seem so. The risk this time in Tesco are high.

Berkshire Hathaway's portfolio consist names like Coca-Cola, IBM and American Express and it started to include Tesco in 2006 and by 2012 owned more than 5% of the business.

What happened next?
The stake had fallen to 3.7% by the end of 2013 , with investment capital of  $1.7bn and continuing the fall since then Tesco's share price has fallen nearly 50%. It has now made the value to investment half of it's original value.

In addition to that Tesco has seen declining sales amid increased competition. The discount retailers like Aldi and Lidl are in the in the market and Marks & Spencer and Waitrose are providing high end offerings to attract customers.

Tesco says  Financial Conduct Authority (FCA) has been notified it that it is under investigation following its admission last week that it overstated its half-year profit guidance by £250m.
The supermarket giant will co-operate fully with the FCA and other relevant authorities.

The news induced a new fall in Tesco's share price, its lowest for more than 10 years. leaving it down 3% at 180p.

Tesco has itself has  launched its own investigation into the issue.  Deloitte, together with Freshfields, the group's external legal advisers will do the investigation.

Four executives were suspended in connection with accounting problem and there was change in high level management. Chief executive Dave Lewis has only been in the job a month, while chief financial officer Alan Stewart, who was originally due to join the company on 1 December, had his start date brought forward and took up the post last week.