Background
Perhaps some of you might have guessed it right - Berkshire Hathaway Inc. stock (BRK Class A, BRK Class B) is the most expensive stock (BRK.A) in the world quoting US$439,460 at NYSE as on 10th May 2021. The company was founded as Textile manufacturing company in 1839 by Oliver Chace and formerly known as Valley Falls Company. In 1929, Valley Falls Company merged with the Berkshire Cotton Manufacturing Company, to form a new company Berkshire Fine Spinning Associates. In 1955, Berkshire Fine Spinning Associates merged with the Hathaway Manufacturing Company, to form Berkshire Hathaway Inc. The textile continued to be core business of the company till 1967, which was eventually shutdown in 1985.
Berkshire Hathaway Inc. is an US Multinational conglomerate holding company, having its headquarter at Omaha, Nebraska. Berkshire owns variety of businesses in the field of confectionary, diversified investments, food processing, Aerospace, Automotive, Insurance, retail, home-furnishings, Internet, Real estate, vacuum cleaners, railroads, encyclopedia, jewelry sales, uniforms, and utilities etc. It employs a large workforce of 360,000 people world-over. The company is owned by none other than world renowned Warren Buffett with 30.71% of voting rights and 16.45% of economic interests. The other key managerial officials are Charles Munger (Vice Chairman), Greg Abel (Vice Chairman, Non-insurance operations) and Ajit Jain (Vice Chairman, Insurance Operations).
Stock Journey
According to reports, Berkshire Hathaway never went public as it had issued stocks even before Securities Exchange Act was passed in 1934. Warren Buffett commenced buying Berkshire Hathaway stock in 1962, after noticing a price pattern. In 1964, CEO Stanton made an oral offer to buyback Buffett's stake for price of $11.5 per share but Buffett subsequently received tender offer in writing for a price of $11.375 per share. Instead of selling shares at a slightly lower price, Buffett started buying more of the stock to acquire controlling stake in the company. Berkshire Hathaway invests in companies that have long history of paying dividends. Buffett's strategy is to reinvest dividends rather than paying out to investors.
The stock price for Class A shares moved up by leaps and bounds ever since Buffett took over, trading at $275 in 1980, $32,500 in 1995, and $439,460 at market close on 10th May 2021. The Class B shares first issued in 1996 quoted $20.66, $79 in 2010, and $292 market close on 10th May 2021. The NASDAQ Stock Exchange found Class A share price too high to handle when it would upgrade its computer system on May 17, 2021 in order to allow share price go beyond $429,496.7295 in the system. The Class A shares have never been split and Buffett stated in 1984 letter to shareholders he never intends to go for stock split. The market capitalization of Berkshire Hathaway Inc. stands at $668.16 billion, making it world's 8th most valuable company by market cap.
Woodstock for Capitalists
Buffett's record of creating wealth for shareholders has made annual general meeting of the company as a much awaited event of the year in the world of finance. Generally, Retail Investors do not attend annual meetings of the companies, but Berkshire Hathaway is an exception. Warren Buffett also known as the Oracle of Omaha, and every year, investors from around the world numbering 40,000 travel to Omaha, Neb, to hear his wisdom at the company's shareholders meeting. This annual event has become known as Woodstock for Capitalists in the financial press. Class A and Class B shareholders are entitled to attend the annual meeting. Non-shareholders could buy guest passes to attend the annual meet. The day long, carnival type environment features sales offered by Berkshire subsidiaries, disco balls, comedy skits, music, celebrities and dancing fames.
This year event was held as live-stream only (2nd in succession) on 1st May 2021 when Vice Chairman, Charlie Munger, aged 97 years, made a casual remark that indicated Greg Abel, Vice Chaiman of Non-insurance Operations, would succeed Warren Buffett, as CEO of the company whenever Buffett, aged 90 years, decides to step down. Due to live-streaming only event, this years' annual event was witnessed by thousands of non-shareholders across the globe.
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