5 ms·

For us non-financial types: What is the motivation for avoiding a stock split?

by blt 5y ago

site-packages1 5y ago
One reason is that they now have the highest stock price and that's a cool selling point for BK. Not their only one, clearly, but a neat point to make.
dragontamer 5y ago
BRK.A are "voting" shares. My understanding is that they want to keep the "voting pool" to be richer / upper class people. Rumor is that the shareholders meeting is a giant party, a who's-who of the elite world. You can only have that culture if you have a very high barrier to entry. In any case, the high share price ensures a certain class of people in the voting pool: an old-school sense of community and elitism but... hey, you can't argue that it doesn't work. Not much other reason needed.
- Waterluvian 5y ago
  So r/wallstreetbets needs to pool together to buy voting shares and send their best and brightest to crash the party?
  - deleted 5y ago
    [deleted]
- electroly 5y ago
  The shareholder meeting is open to BRK.B holders (~$300 for a share). My sister and my dad went one year. No rumors required. You can watch it online.
- ISL 5y ago
  BRK.B also votes, but with much-less voting power. It isn't to discriminate on class (which is a definite side-effect), but rather to discriminate on time-horizon. Berkshire plays the long game and has taken great pains to attract/retain long-term shareholders. (As has, to an extent, Amazon) Almost nobody can afford to day-trade BRK.A. Furthermore, most holders of A probably don't want to sell on any given day. If you want to trade Berkshire on short timescales, B is available/liquid, but your votes don't count for much.
adrianb 5y ago
I read it's because he only wants the most absolutely committed investors owning shares, not superficial speculators. You would overthink if you had to spend that much on a single share. Although modern platforms with their fractional shares might negate the advantage a bit.
rexelhoff 5y ago
Buffet has said before that it's intentionally high to keep out short-term traders and inexperienced traders. He wants investors who will hold for long terms. If the price is so high, there's only a particular clientele that can afford to buy it. They do have a different code of class b stock that is more affordable.

For us non-financial types: What is the motivation for avoiding a stock split?

by blt 5y ago

For us non-financial types: What is the motivation for avoiding a stock split?

One reason is that they now have the highest stock price and that's a cool selling point for BK. Not their only one, clearly, but a neat point to make.

dragontamer 5y ago

BRK.A are "voting" shares. My understanding is that they want to keep the "voting pool" to be richer / upper class people. Rumor is that the shareholders meeting is a giant party, a who's-who of the elite world. You can only have that culture if you have a very high barrier to entry. In any case, the high share price ensures a certain class of people in the voting pool: an old-school sense of community and elitism but... hey, you can't argue that it doesn't work. Not much other reason needed.

Waterluvian 5y ago
So r/wallstreetbets needs to pool together to buy voting shares and send their best and brightest to crash the party?
- deleted 5y ago
  [deleted]
electroly 5y ago
The shareholder meeting is open to BRK.B holders (~$300 for a share). My sister and my dad went one year. No rumors required. You can watch it online.
ISL 5y ago
BRK.B also votes, but with much-less voting power. It isn't to discriminate on class (which is a definite side-effect), but rather to discriminate on time-horizon. Berkshire plays the long game and has taken great pains to attract/retain long-term shareholders. (As has, to an extent, Amazon) Almost nobody can afford to day-trade BRK.A. Furthermore, most holders of A probably don't want to sell on any given day. If you want to trade Berkshire on short timescales, B is available/liquid, but your votes don't count for much.

adrianb 5y ago

I read it's because he only wants the most absolutely committed investors owning shares, not superficial speculators. You would overthink if you had to spend that much on a single share. Although modern platforms with their fractional shares might negate the advantage a bit.

rexelhoff 5y ago

Buffet has said before that it's intentionally high to keep out short-term traders and inexperienced traders. He wants investors who will hold for long terms. If the price is so high, there's only a particular clientele that can afford to buy it. They do have a different code of class b stock that is more affordable.