Berkshire Class A Shares: History, Performance, and More

Berkshire Class A shares have a rich history dating back to 1965, when Warren Buffett's company, Berkshire Hathaway, was first listed on the New York Stock Exchange.

The Class A shares have consistently outperformed the S&P 500 over the long term, with a total return of over 2,000% since 1965, compared to the S&P 500's total return of around 1,000% over the same period.

Warren Buffett's value investing philosophy has been a key driver of Berkshire's success, as he has consistently sought to invest in high-quality businesses with strong competitive advantages.

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Berkshire Class A shares have a rich history, and it's fascinating to explore how they've evolved over time.

In 1996, Berkshire Hathaway introduced Class B shares, which allowed investors to buy shares for 1/30 of the price of a Class A share, making it a more affordable option.

The market demanded a lower-priced entry point, and Warren Buffett responded by issuing 517,500 shares of Class B shares.

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A 50-to-1 stock split in 2010 further reduced the price difference, sending the ratio to 1/1,500.

As a result, each share of a Class A common stock is now convertible to 1,500 shares of Class B common stock.

Class A shares still hold the majority of the voting power, with Class B shares carrying 1/10,000 of the voting power of Class A shares.

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Berkshire Hathaway's history dates back to its highly valued single class of stock, which was trading for about $30,000.

The market demanded a lower-priced option, prompting the introduction of Class B shares in 1996.

Warren Buffett and the board issued 517,500 shares of Class B shares, allowing investors to buy shares for 1/30 of the price of a Class A share.

This move sent shockwaves through the market, but Buffett marketed Class B shares as a long-term investment to prevent volatility.

A 50-to-1 stock split in 2010 further reduced the price, making Class B shares even more accessible.

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The ratio of Class A to Class B shares is now 1/1,500, meaning each Class A share is convertible to 1,500 Class B shares.

Class B shares carry correspondingly lower voting rights, with each share now holding 1/10,000 of the voting power of a Class A share.

This shift in the market has allowed more investors to participate in Berkshire Hathaway's success.

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Berkshire Class A shares have a rich history, and their prices have fluctuated over the years. The first public offering of Class A shares took place in 1988, with an initial price of $6,000 per share.

In the early years, the price of Class A shares increased steadily, reaching $6,600 by 1989. The price continued to rise throughout the 1990s, reaching $8,000 by 1999.

The price of Class A shares surged in the 2000s, reaching a high of $14,000 in 2007. This was largely due to Warren Buffett's successful investment strategies and the company's strong financial performance.

Despite a brief decline during the 2008 financial crisis, the price of Class A shares recovered quickly and continued to rise, reaching $14,500 in 2010.

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Warren Buffett's Berkshire Hathaway offers two types of shares: Class A and Class B. Class A shares closed at a staggering $657,180 per share on July 26, 2024.

One reason investors prefer Class A shares is that they will never split, according to Warren Buffett. He believes the high price helps attract investors focused on the long term.

The price difference between Class A and Class B shares is significant. Class B shares closed at $437.66 on July 26, 2024, which is 1/1500 of the price of Class A shares.

The introduction of Class B shares in 1996 was a deliberate move by Buffett to make the stock more accessible to investors. Class B shares were initially priced at 1/30th of the price of Class A shares.

Warren Buffett resisted splitting Berkshire Hathaway's stock for a long time, but eventually introduced Class B shares to prevent unit trusts and mutual funds from emerging that would charge management fees and use misleading marketing practices.

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The astronomical price of Berkshire Hathaway Class A shares is a major barrier for most investors. It's simply beyond the means of the average investor.

Investing in Class A shares offers a long-term investment opportunity, but it's unlikely that the stock will be split in the future.

The price of Class A shares is a significant drawback, making it difficult for individual investors to invest in Berkshire Hathaway.

On the other hand, Class B shares offer more flexibility for investors, which may lead to future stock splits.

Here are some key benefits and drawbacks of Berkshire Hathaway Class A and Class B shares:

Berkshire Class A shares are available for purchase through the New York Stock Exchange (NYSE) under the ticker symbol BRK.A.

You can buy these shares directly from the NYSE or through a brokerage firm.

Each share represents a tiny fraction of Berkshire Hathaway's massive portfolio, which includes companies like Coca-Cola, American Express, and Wells Fargo.

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As a shareholder of Berkshire Hathaway, it's essential to understand the share count. There are 1.45 million Class A shares outstanding.

These Class A shares are just a small fraction of the total number of shares, which is significantly higher for Class B shares. There are more than 2.17 billion Class B shares.

To give you a better idea of the share count, let's break it down:

Keep in mind that these numbers are subject to change, but they give you a general idea of the share count for Berkshire Hathaway.

As a shareholder of Berkshire Hathaway, you have the option to convert your Class A shares into Class B shares, but not the other way around. Each Class A share can be converted into 1,500 shares of Class B stock, giving you a larger stake in the company.

This conversion option is a unique feature of Berkshire Hathaway's share structure. It's worth noting that Class B shares are not as highly valued as Class A shares, with a price per share of $437.66 compared to $657,180 for Class A shares.

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If you're considering converting your Class A shares to Class B shares, it's essential to understand the numbers involved. For example, if you own one Class A share, you can convert it into 1,500 Class B shares.

Here's a rough estimate of the value of these shares:

Keep in mind that this is a simplified example and actual values may vary based on market conditions.

Berkshire Class A shares have impressive financial performance metrics, particularly when it comes to asset efficiency. ROE (Return on Equity) is a key indicator of a company's profitability, and Berkshire's ROE is a standout at 18.44%.

ROA (Return on Assets) is another important metric, and Berkshire's ROA of 7.89% is a respectable figure.

Here's a brief summary of Berkshire's financial performance:

Asset efficiency is a crucial aspect of a company's financial performance. It measures how well a company uses its assets to generate returns. In the case of BRK.B, we can see that the company has a ROE (Return on Equity) of 18.44% over the last year, which is significantly higher than the average long-term ROE of 14%. This indicates that BRK.B is doing a great job of generating returns from its equity.

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To put this in perspective, a ROE of 18.44% means that for every dollar of equity, BRK.B generates 18.44 cents in profit. This is a testament to the company's efficient use of its assets.

Here's a breakdown of BRK.B's ROA (Return on Assets) and ROE over the last year:

It's worth noting that a ROA of 7.89% is lower than the ROE, which suggests that BRK.B may be generating returns from its equity more efficiently than from its assets. However, both ratios are positive, indicating that the company is still using its assets effectively.

Liquidity is a crucial aspect of a company's financial health, and we can see this by looking at the liquidity ratios of BRK.B. The Cash Ratio is a strong 19.25, indicating that the company has a significant amount of cash on hand.

This is a good sign, as it means the company can cover its short-term debts easily. The Current Ratio is an impressive 25.34, showing that the company has a large amount of current assets compared to its current liabilities.

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This high ratio suggests that BRK.B is well-equipped to meet its short-term obligations. The Quick Ratio, at 23.94, is also a healthy indicator of liquidity.

This ratio takes into account only the most liquid assets, such as cash and accounts receivable, and subtracts the most liquid liabilities, such as accounts payable. Here's a summary of BRK.B's liquidity ratios:

To capture dividends from BRK-A, you'll want to buy shares one day before the ex-dividend date. This is based on BRK-A's historical data, which is no guarantee of future results.

The upcoming ex-dividend date is a crucial piece of information to keep track of. You can estimate the purchase date accordingly to maximize your dividend capture.

BRK-A's shares have historically recovered at an average price, which is a positive sign for investors. This average price recovery can help offset the cost of buying the shares.

The average yield on cost is another important factor to consider when implementing a dividend capture strategy. It's a key metric to help you understand the potential return on your investment.

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Berkshire Hathaway's Class A shares are among the world's most coveted stocks.

Their hefty price tag puts them well out of the reach of the average investor.

If you're looking for a way to reap the benefits of investing in the company, consider Berkshire's Class B shares.

The stock price of Berkshire's class A shares is significantly higher than that of class B shares. The ratio of class A to class B shares is 1:1500, and this ratio is consistently reflected in their prices.

This means that if you own class A shares, you can convert them into 1500 class B shares at any time. The class A stock price is currently trading at $557,075.

If you divide the class A stock price by 1500, you get $371.38, which is incredibly close to the $367.44 that the class B stock is currently trading at. The prices of both classes of shares move in tandem, going up and down together.

You can only change your holdings from class B to class A by selling your B shares and buying A shares instead.

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