Benjamin Golub
Can someone explain to me why Buffett has kept BRK.A so expensive and not split it? What does Berkshire Hathaway have to gain from it? -
I understand it keeps smaller, "inferior" investors out but I'm not sure why you'd want this. - Benjamin Golub from Bookmarklet
It also keeps trading down - which apparently has kept Berkshire Hathaway from entering the S&P 500 because there is a minimum trading threshold. I can't really think of a negative to being in the S&P 500. There are probably some short turn positives though (any index fund tracking it would have to start purchasing BRK and drive up the price a bit) - Benjamin Golub
“Were we to split the stock or take other actions focusing on stock price rather than business value, we would attract an entering class of buyers inferior to the existing class of sellers,” Buffett wrote in his 1983 annual report, when the Class A shares traded for about $1,300. “Would a potential one- share purchaser be better off if we split 100-for-1 so he could buy 100 shares? Those who think so and who would buy the stock because of the split or in anticipation of one would definitely downgrade the quality of our present shareholder group.” -- - Ken Sheppardson
...based on what I've read and seen, I think your first impression is right: it's about keeping out the smaller "inferior" investors. i don't think he's exactly a man of the people. two uninformed cents. - .LAG liked that
Yeah I read that too (which is where I got the "inferior" in quotes from). I think at some point you just can't ignore that ridiculous price though. (and I think that point has come and gone long ago :P) - Benjamin Golub
"Buffett has long been opposed to stock splits for Berkshire’s class A shares...Buffett’s opposition to the move stems from his theory that investors should think of themselves as partners in a company and not short-term traders" from - Shea
Well, keeping the price high keeps volume a whole lot lower and probably dampens out a lot of volatility that really doesn't have any benefit to the company. It's really more of a "private" company with an open pool of investors than a "public" company. - Ken Sheppardson
If I owned a single share I wouldn't feel like a partner. I'd feel like a prisoner. - Benjamin Golub
I'll bet if you owned a share you'd probably have enough money that you'd never actually think about it. ;-) - Ken Sheppardson
...ha! One share, at $100K+ ...yeah, that would make you feel like barging into a board meeting and demanding changes... I mean, the $100K part. And then, you realize: you only hold ONE share. jeez! - .LAG liked that
Holding a BRKA also grants you admission to the Berkshire Hathaway Annual Meeting, which is supposed to be awesome. If you want to buy less, there are brokers that let you buy fractional shares, like sharebuilder, and mutual funds that hold a lot of BRK, for example BTF: - Casey Muller
Benjamin - Why don't you buy BRK.b? 1/30th price but 1/200 the privileges :) - Atul Arora
Casey, what's supposed to be awesome about the Berkshire Hathaway Annual Meeting? - Dan Hsiao
IMHO, the liquidity advantages of B shares are a selling point. - Sean O'Connor
Dan, I've heard it called the woodstock of investing, that kind of thing. And all of the BRK subsidiaries have a big fair with discounts for shareholders. - Casey Muller