Warren Buffett heads one of the most successful and largest companies in the country: Berkshire Hathaway. This holding organization has gone through its share of ups and downs financially, but one place where the holdings company has always excelled is in the stock market. In fact, Berkshire Hathaway’s stocks are among the most expensive in the world—
At the time of writing, Berkshire Hathaway stocks are valued at around $250,000 each. To put that in a bit of perspective, the average stock price for an S&P 500 is around $65. Some share cost only a few dollars per share while companies like Berkshire Hathaway go for six figures each. So why does it cost so much? Well, that’s because unlike other companies, Berkshire Hathaway has never split its stock—or has it?
Berkshire’s Baby Bs
Berkshire Hathaway first listed its stock on the New York Stock Exchange in 1988, and each share went for $4,300 which was a record price at the time. However, by the mid 1990s, that price had skyrocketed to around $30,000 per share. Warren Buffett, however, refused to split the stock into smaller, more affordable sizes so some investing companies came up with a plan to purchase a share and then sell fractional portions—in essence, splitting the stock for Buffett.
Of course, Buffett was against this idea and decided to counter it by splitting some of the stock himself and creating a second stock option—Berkshire Hathaway’s Class B shares. These shares, which were created in 1996, featured 1/30th of the buying power of a single Class A share, and went for around $1,000. The stocks became known as the “baby B’s” and were designed for people who wanted to invest in the company, but didn’t have the money for the Class A shares.
The Class B shares were split a second time in 2010 in order to help fund the acquisition of BNSF, and at the time of writing each Class B share is now worth around 1/1,500th the voting rights of a single Class A share. Class B shares currently are valued at $166 per share.
Meanwhile, all of the Class A shares have remained unsplit (aside from the handful of shares which were split to form the Class B shares) and the value continues to go up and up.
When will Berkshire Split its Stocks?
This is one of the most commonly asked questions where it comes to Berkshire Hathaway’s stocks is when they will be split again. However, while it’s possible that eventually the Class B stocks will be split again, it’s doubtful that it will happen soon. And, as far as the Class A shares go, that’s probably not going to happen as long as Buffett is alive and even after his death a split of the valuable shares is highly unlikely.