Warrent Buffett does the splits for Berkshire Hathaway
I'm buying! A stock split effectively brings the share price down to a very affordable level and I am quite confident that the B shares will become a hot speculator favourite which means more violatility but also means the $66.51 post-split share price might become $100 or $200. That is assuming that Berkshire do not control the price.
From my knowledge, Berkshire B shares (which represents 1/30 of an A share) have never traded significantly above 1/30 of an A share as Berkshire does buy in more A shares and sell more B share to bring the price back to equilibrium. However, I have a feeling that might changed.
It's a wild speculative bet and I'm loving it! :) Even if it does not pan out the way I think, Berkshire is not in anyway inferior to any good business at the current price.
Berkshire Hathaway Inc.'s planned 50- for-1 stock split will put its Class B shares within reach of investors Warren Buffett once called an ``inferior'' class.
The proposed split, announced today as part of Berkshire's takeover of Burlington Northern Santa Fe Corp., would push the price of each Class B share to $US66.51 from $US3,325.35, data compiled by Bloomberg show. Buffett created the equities in 1996 by dividing Class A shares by 30 to prevent fund managers from carving them up in trusts and selling lower-priced interests. The B shares have never traded below $US990.
I'm buying! A stock split effectively brings the share price down to a very affordable level and I am quite confident that the B shares will become a hot speculator favourite which means more violatility but also means the $66.51 post-split share price might become $100 or $200. That is assuming that Berkshire do not control the price.
From my knowledge, Berkshire B shares (which represents 1/30 of an A share) have never traded significantly above 1/30 of an A share as Berkshire does buy in more A shares and sell more B share to bring the price back to equilibrium. However, I have a feeling that might changed.
It's a wild speculative bet and I'm loving it! :) Even if it does not pan out the way I think, Berkshire is not in anyway inferior to any good business at the current price.
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