🚨 Important: From 22/05/24 NZT our broker will no longer allow purchases of Berkshire Hathaway Inc. Class A (BRK.A) due to increased fees.
Not to worry you can still purchase Berkshire Hathaway Inc. Hld B (BRK.B). If you already own BRK.A shares you can still hold the shares and sell them as normal.
Aside from the price, the main differences between Berkshire Hathaway Class A shares and Class B shares is around voting rights, stock splits, and performance.
Voting Rights
Class B shareholder has 1/10,000th of the voting rights of a Class A shareholder since each Class A share represents a larger piece of the Berkshire Hathaway pie (there are only 709,840 outstanding Class A shares, compared to 1.39B Class B shares).
Performance
BRK.A & B will not consistently have the same performance, because they will still have different market demand; if BRK.A increases in value by 5% next year, there’s no guarantee that BRK.B will grow at the same rate.
Stock splits
A stock split is a practice in which a company can take it’s currently issued stock and multiply it by X amount by issuing X shares for each 1 that’s outstanding. Think of it like slicing a pizza: you start with one pie worth $20, and after cutting it into 8 slices you still have $20 worth of pizza, but in smaller pieces. You can then buy and sell those smaller pieces independently instead of having to move a whole pie at a time. Class B shares allow investors with less money to still get their piece of the pie.
Berkshire Hathaway has split their Class B shares once - in January 2010 when they issued a 50-1 stock split. Investors woke up with 50x the shares they fell asleep with, but worth the same total value. At the time this split brought the price for one BRK.B share down from $3,286 to $76.
Read more: |