What Is a Baby Berkshire?
Baby Berkshire is an epithet for Berkshire Hathaway Class B shares after the 50:1 stock split on Jan. 21, 2010. The stock split made it simpler for Berkshire Hathaway to pay for its acquisition of the Burlington Northern Santa Fe railroad.
The primary difference between Berkshire Hathaway's Class A stock (BRK-A) and Class B stock (BRK-B) is the share price. As of April 22, 2022, at close, Berkshire Hathaway Class A traded for about $505,440 per share. Berkshire Hathaway Class B shares traded at around $335.56.
Grasping Baby Berkshire
At the point when Berkshire previously issued 517,500 shares of class B shares in 1996, investors initially could purchase shares for one-30th of the price of a Class A share of stock. The 50-to-1 stock split in 2010 sent the ratio to 1,500-to-1. Class B shares initially accompanied disproportionally decreased voting rights, with 200 class B shares expected to match the voting weight of a single class A share. The class B split increased that ratio to 10,000 to 1.
Before the stock split, Berkshire class B shares didn't have adequate trading volume to make them eligible for inclusion in the S&P 500 index. The split brought about increased trading volume as estimated in shares and Berkshire class B shares were added to the S&P 500 on Feb. 12, 2010.
"Baby Berkshire" is additionally used to allude to businesses in view of the Berkshire Hathaway business model.
Companies with Baby Berkshire Business Models
Columnists likewise utilize the term "Baby Berkshire" to depict companies with business models similar to Berkshire Hathaway's. Compass Diversified Holdings is one of these companies. Like Berkshire, Compass Diversified Holdings is basically a public portfolio of operating companies. "Baby Berkshire" has additionally been utilized in reference to the diversified holding company Leucadia National, presently known as Jefferies Financial Group (JEF), and to Alleghany Corporation (Y), the insurance conglomerate Berkshire Hathaway agreed to secure in 2022. Markel, a holding company for global insurance, reinsurance, and investment operations, has likewise been alluded to as a "Baby Berkshire" by the media.
- The primary differences between Berkshire Hathaway's Class A stock (BRK-A) and Class B stock (BRK-B) are the share price and voting power.
- The term Baby Berkshire has additionally been utilized to allude to companies with business models like Berkshire Hathaway's.
- Baby Berkshire is an epithet for Berkshire Hathaway Class B shares after the 50:1 stock split in 2010.