Level 3 Hit as Berkshire Sells

Level 3 Communications(LVLT Quote) was taking gas in the premarket after a SEC filing showed Warren Buffett's Berkshire Hathaway(BRK.A Quote) sold off most of its stake in the company.

The shares were recently down 28 cents, or 5%, to $5.35 on Island.

Level 3 is one of a handful of telecommunications turnaround plays Berkshire bought into, either via debt or stock, in the second half of 2002. In a 13-F filing made Wednesday night, the holding company reported a 1.6 million-share stake in Level 3, down from close to 20 million shares as recently as June 30.

Shares of the Broomfield, Colo., company were trading around $2.75 when news of Buffett's investment -- via a convertible preferred note -- became known on July 5, 2002. They closed at $4.07 the next trading day and have basically treaded water ever since, although many credit Buffett's investment with keeping the company out of bankruptcy.

Level 3 was trading near $50 in early 2001.