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Tuesday, December 22 2009  |  08:23 EDT  | 
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Market Currents

Tuesday, November 3, 2009
7:57 AM TweetThis
  • Berkshire will split its Class B shares (BRK.B) 50 to 1 in order to accommodate holders of smaller amounts of Burlington Northern Santa Fe (BNI) shares who opt for a share exchange rather than a cash payment.
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This news story has 5 comments:

  •  
    This will improve liquidity and may provide a (very) modest boost to the stock, as the current share price (~$3300 each) is an unwarranted barrier to trading.
    Nov 03 08:37 AM | Link | Reply
  •  
    I would guess that this unprecedented split in BRK.B shares could see a material boost in share demand, as many investors who would not or could not have considered a $3300 entry price will find $66 irresistible. I would not be at all surprised to see BRK.B prices rise swiftly after the split.


    On Nov 03 08:37 AM Vox Rationalis wrote:

    > This will improve liquidity and may provide a (very) modest boost
    > to the stock, as the current share price (~$3300 each) is an unwarranted
    > barrier to trading.
    Nov 03 08:57 AM | Link | Reply
  •  
    You need to remember that BRKB itself is derived from BRKA. If BRKB moves, BRKA will have to move in lock step. Furthermore, BRKA will always command a premium.

    This is a non-event.
    Nov 03 09:23 AM | Link | Reply
  •  
    Ricard is mostly correct; if the B share price were to advance due to improved liquidity and become more valuable than 1/1500th of an A share, one should expect A share conversion and arbitrage to push the shares back to square. This does not mean it won't happen, but rather that the A shares will provide meaningful resistance.

    I think the historical premium of the A shares has more to do with poor liquidity than anything else. The increased voting rights are worth very little, considering the dominant position of Buffett and Munger.
    Nov 03 10:35 AM | Link | Reply
  •  
    What day in the market i hope next year be better year. Just buying all the bottom stocks for friday. HEY check out my newsletter streetgeniusofwallstre... please read disclaimer if have any questions just email.
    Nov 27 09:23 PM | Link | Reply
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