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If you read the Berkshire annual reports from back then, I think Buffet would have strongly preferred to do what FB is doing now, if he could have, or the vehic
by vessenes 16y ago
If you read the Berkshire annual reports from back then, I think Buffet would have strongly preferred to do what FB is doing now, if he could have, or the vehicles existed.
He knew his mom-and-pop investors needed liquidity, and wasn't able to buy them all out himself, so he went for the market option. But, he was clearly ambivalent about it. I believe his first instructions to his floor trader were that he hoped there would be no transactions in the first year of listing.
- cynicalkane 16y agoAt the time, Berkshire was already public. Buffett maintained the high share price because he wanted his owners to be serious about owning the stock, the test of seriousness being the high cost of ownership. When investment firms threatened to remove this barrier, Buffett went ahead and preempted them.
- vessenes 16y agoBuffet definitely was already in control of the company when he decided to list on the NYSE, in fact, recall that he bought the company largely out of pique at getting 'chiseled' on price by the existing management team during a private purchase of shares.. The only reason he listed was to get his current shareholders some liquidity; he's quite clear about this in his annual letters from the time. He had no need for or interest in the liquidity himself, and was, I would say judging from his actions over the next 20 years, pretty happy with his then-current disclosure situation. He did pretty much everything he could to keep Berkshire out of the drive for quarterly investment earnings game for public companies, and worked hard to reduce any requirements for reporting on what was going on at Berkshire. Also, agreed, that high share prices helped him make a point that he spent many decades beating the drum on: value over price.