Warren Buffett’s Berkshire Hathaway just hit a record $700 billion market cap. That’s a headache for the investor.

• Warren Buffett’s Berkshire Hathaway reached a record $700 billion market capitalization this week.
• Buffett may not welcome the milestone as stock buybacks are now more expensive than ever.
• The investor estimated the value of Berkshire’s businesses at $700 billion last year.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Warren Buffett’s Berkshire Hathaway notched a record $700 billion market capitalization this week. While most CEOs would be popping the champagne, Buffett may have mixed feelings about the achievement.

The legendary bargain hunter is itching to spend about half of Berkshire’s $149 billion cash pile, but he’s struggled to find deals in recent years. Stocks have climbed to record highs, and private equity firms and special-purpose acquisition companies (SPACs) are pricing him out of acquisitions.

Short of options, Buffett has been ramping up stock buybacks. Berkshire repurchased a record $25 billion of its shares in 2020, and likely surpassed that figure last year. However, the investor has emphasized that he will only buy back shares at a price below his conservative estimate of Berkshire’s intrinsic value.

“It’s hard to go wrong when you’re buying dollar bills for 80¢ or less,” Buffett quipped in his 2012 shareholder letter.

If Berkshire stock blows past Buffett’s price ceiling for buybacks, he could be forced to rein in or halt his repurchases, shutting a key avenue of spending for him.

The investor pegged the value of Berkshire’s businesses at around $700 billion during the company’s shareholder meeting last year, suggesting he might not see its shares as a bargain any longer.

However, there’s reason to believe that Buffett puts a higher value on Berkshire. The so-called “Oracle of Omaha” told his shareholders in 2008, when Berkshire’s market cap was about $200 billion, that the company could theoretically be acquired for triple that amount.

“There’s no guarantee that if somebody wanted to try a $600- or $700 billion takeover — and it might be a lot larger than that if you go out a ways — that it can’t be done,” he said.

While Buffett was pricing in a takeover premium, he apparently considered $700 billion to be a fair offer for Berkshire 13 years ago. Given his company’s net assets have quadrupled in value to about $450 billion since then, he probably values Berkshire a lot more highly today — and might not balk at repurchasing its stock at current levels.

Read more: The Smead Value Fund beat 99% of its peers in 2021. Its managers share where they’re putting their money in 2022 — including 3 stocks they’re betting big on.