12 ms·
"32-bit number representing the number of 1/100'ths of a penny ought to be enough for anybody."
by Jiocus 5y ago
"32-bit number representing the number of 1/100'ths of a penny ought to be enough for anybody."
- nightski 5y agoIt probably would be for quite some time. The article lists the next highest stock is $5,100. This is all due to stubbornness on the part of Warren Buffet, for better or worse.
- coliveira 5y agoThis should be easy for Nasdaq to solve: just force companies to split their shares before they reach certain limits. Markets can create rules that listed companies need to follow, and this seems to be a useful one.
- eru 5y agoExchanges can create rules, but there's a limit to how far they can push it: If Nasdaq makes too many rules that investors or companies dislike, they'll list respectively trade elsewhere. Developments in the rest of the market make stock splitting less of an imperative than in the past. Eg Robinhood and many other retail brokerages allow you to own partial shares now. If you follow the logic of these recent developments, individual shares might become a thing of the past, and we will just directly trade fractions of whole companies. (On your computer, rational numbers are easy to implement: just represent them as a pair of arbitrary-length integers. Operations will be a lot slower than on floats or ints, but the exchange doesn't need to do too many operations per second. And market makers and hedge funds etc can use whatever approximation scheme they want in their internal systems.)
- berkes 5y agoBut how can you own part of a share?
- twic 5y agoSame way you can own part of a horse.
- corin_ 5y agoThe same way you can own part of a house, part of a business, or even part of a bottle of wine. Contracts can easily dictate who owns how much of a thing, they wouldn't have to literally rip a paper stock in two.
- colonwqbang 5y agoI'm not convinced. Can you go to the Berkshire shareholder meeting and vote for your 0.0001 shares? I find it much more likely that it's actually your broker who truly owns the share and you have a contract with them. This is not at all like a house which can actually have two true owners. That doesn't mean there's anything wrong with such an arrangement, of course.
- boomboomsubban 5y ago>Can you go to the Berkshire shareholder meeting and vote for your 0.0001 shares You could form a contract with your co-share owners describing how you allocate that benefit, just like would be necessary with a house with co-owners. I have no idea if that happens, but it's certainly just as possible.
- lostlogin 5y ago> Can you go to the Berkshire shareholder meeting and vote for your 0.0001 shares? I voted for part of a politician in my electorate.
- eru 5y agoAlmost no one in the US 'truly' owns any shares. They are all held by 'Depository Trust Company' in the name of 'Cede and Company'. https://en.wikipedia.org/wiki/Depository_Trust_Company https://en.wikipedia.org/wiki/Depository_Trust_Company https://en.wikipedia.org/wiki/Cede_and_Company https://en.wikipedia.org/wiki/Cede_and_Company says > Cede technically owns substantially all of the publicly issued stock in the United States.[2] Thus, investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede.[3] Modifying the last link in that chain isn't such a big deal.
- mulmen 5y agoOr they could use a larger integer.
- cturner 5y agoBerkshire Hathaway is NYSE listed, so Nasdaq do not set those rules for them. If a primary market created rules to mitigate systems issues, they would be harshly judged for it, and likely lose business to competitors.
- wlll 5y agoI feel like the rule "you must stock split before the value of your shares reaches $429,496.7296 per share" isn't going to put too many people off :)
- john_alan 5y agoYep, he’s really trying to force a barrier to entry. So his stock can’t be bought by small players.
- pmorici 5y agoHe created the BRK.B share class years ago and has split that once to keep the price manageable. It stands at 1/1500 of a class A share today. The B shares do have reduced voting rights relative to the A shares on a proportional basis.
- loftyal 5y agoI guess you haven't heard of fractional shares
- john_alan 5y agoLol. You don’t own the share. You don’t get voting rights and the aggregator behaves as a single investor.
- loftyal 5y agoLol. Some brokers allow you to vote on fractional shares, and technically you don't own the share, but why would they care if you do or not, it's about the voting rights.
- pinky1417 5y agoFirst, as other posters have mentioned, there are b shares that trade in the hundreds of dollars - BRK.B. Yes, their voting rights are disproportionately lower, but you can still get a stake in the ownership without having $400,000 in your bank account. I own B shares. It doesn’t bother me that I have fewer voting rights because I trust my fellow Berkshire owners. So there’s little barrier to entry in merely owning a small stake in Berkshire’s economic output. Second, if you want to argue there’s a barrier to entry for voting purposes, that also doesn’t make sense: you need to have a ton of ownership in any stock to make a difference in ownership as an outside investor. It doesn’t matter if the share price is $1 million or $10 if I need $50 million in share value to make a dent in voting. Third, Buffett has stated that he doesn’t want to split shares because he wants to encourage long-term owners. There’s a lack of liquidity in A shares; I’ve heard usually only about 1,200 trade a day. He, and I’m sure many other Berkshire shareholders, want their fellow shareholders to think like long-term owners of a private business, especially for shareholders with a lot of voting influence. A high share price and its corresponding low liquidity encourages that.
- Aeolun 5y agoI don’t think Buffet should be forced to do anything simply because the exchange cannot keep up with the increase in price. It’s not like they haven’t seen this coming for literal years. Maybe they were assuming he’d give in?
- katbyte 5y agoat this point he may be holding out to hit that limit
- toyg 5y agoGood Guy Buffett, testing the exchange for them.
- nroets 5y agoIt's not just the exchange that struggles: 1. Many retail investors do not have the funds to buy a full share. 2. Anyone who makes a spreadsheet containing the share prices of largest companies has to make that column wide enough to accommodate 6 digit numbers.
- sunpar 5y agoHe created BRKB for just this purpose. He doesn't need to split BRKA for any reason other than Nasdaq's computers
- valuearb 5y agoThere are numerous OTC stocks trading for over $5,000, I know of at least two over $20,000.
- xref 5y agoWhat nyse/nasdaq stocks are over $5k? I see Lindt & Spruengli AG but it’s listed in Switzerland in CHF Swiss francs
- throwaway2037 5y agoTo be clear, the original poster specific OTC (over-the-counter), which means does not trade on a regular stock exchange, like NYSE & NASDAQ. Also, to give credit to your answer, >5K CHF is more than 5K USD! Looks like CHF->USD is about 1.09 right now.
- deleted 5y ago[deleted]
- captainpiggies 5y agoTo be precise Lindt & Sprüngli (LISN) is currently trading for CHF 90’900 roughly USD 99’485. And as a fun fact they have quite a famous natural dividend a suitcase full of chocolate :)
- valuearb 5y agoI found a couple by going through the OTC daily lists and looking at dividend payers. I’d double take seeing somecompany paying a $500 or $1,000 dividend, look it up and they would have some crazy stock price. But note: they’d also only trade once a month or so.
- throwaway2037 5y agoNice comment. Do you have a website with a list? Or can you share a few names? Others might be interested on specific names.
- LorenPechtel 5y agoStubbornness? More like a deliberate plan to concentrate voting control. You can perfectly well buy Berkshire Hathaway without plonking down a half million dollars--there are class B shares. It's just class B shares don't have anything like the voting power that class A shares have. Class A shares can be divided up into class B shares but you can't combine class B shares to make a class A share. The result is the owners of the class A shares have voting power far beyond their percentage of the company. Warren Buffet has no need for a market in class A shares to even exist. The common man should buy class B.
- ashtonkem 5y agoGenerally, yes. Most companies will go through splits long before that, turning every share outstanding into two or more shares (usually with half the value) on a predetermined date. Having a very high stock price is actually kind of inconvenient, as it makes it hard for random day traders to afford.
- deleted 5y ago[deleted]
- throwaway2037 5y agoTo be clear: "random day traders" are retail with small balance. Institutional players absolutely do not care about stock price. It is notional (or delta) that matters. Samseong in Korea also had (has?) a huge stock price that used to cause issues.