BRK-B 50-for-1 share split

[arbitragr]

Anyone know the logistics and procedural events that will happen due to the split? i.e. what happens between you and your broker and whether there are implications for the stock price given its increased liquidity?

 

 

[scorpioncapital]

". It will also let the "little guy" buy a 100 share lot because the stock is now "cheap". "

 

If the little guy could buy 100 shares after the split he could buy 2 shares before it. It must be for those who can't even buy 100 shares post-split.

[goldfinger]

That's exactly right. Most small "investors" I talk to you think that way.

I have been asked so many times:

"What is the price of a berkshire share" and when I respond they say "It is expensive!", then I explain "It all depends on what you get for that price, right?" then they look at me like there is something I don't understand. Then they talk about some stocks that are cheap because they are below 10 bucks a piece. Yeah, that's what is really happening out there!

[omagh]

scorpion,

 

That's the greater fool thinking by the "little guy".  

 

BRK will ultimately rise or fall based on Berkshire's ability to increase intrinsic value.  A reasonable set of assumptions using the 2-column valuation method shows BRK is slightly undervalued at present operating earnings levels.  With a modest recovery in the economy, that undervaluation will become more pronounced.

 

-O

". It will also let the "little guy" buy a 100 share lot because the stock is now "cheap". "

 

If the little guy could buy 100 shares after the split he could buy 2 shares before it. It must be for those who can't even buy 100 shares post-split.

[value-is-what-you-get]

scorpion,

 

That's the greater fool thinking by the "little guy".  

 

= voting machine = short term

 

BRK will ultimately rise or fall based on Berkshire's ability to increase intrinsic value.

 

= weighing machine = long term

[Guest swf83]

Wouldn't buying BRKB prior to the split be a good move because all the "smaller" investors will go on a feeding frenzy with a $60 something dollar Berkshire stock?

[goldfinger]

Since BRK is undervalued you are not taking a lot of risks as long as you are prepared to hold it if things don't go your way.

My personal speculation is that:

- operating earnings are improving and book value will be at 90K or more soon per A share.

- global recovery is higher than previously expected.

- B shares splitting + BNI acquisition will be complete soon.

- people are now looking more at large caps as they are undervalued relatively speaking.

Those may be short term catalysts for a BRK run up closer to IV soon. We will see...

[omagh]

What is that? Subtitles?  I thought I was keeping the messages simple...  ;D

 

-O

scorpion,

 

That's the greater fool thinking by the "little guy".  

 

= voting machine = short term

 

BRK will ultimately rise or fall based on Berkshire's ability to increase intrinsic value.

 

= weighing machine = long term

[hyten1]

man what is this going to do to the annual meeting :)

 

man the number of people at the meeting is just too many

[shalab]

which is just as well. the little guy who couldn't buy a 'B' share won't go to the annual meeting. if they go, there will be more sales of berkshire merchandise.

[djcattlco]

I believe that 10% of annual Neb Furniture sales occur at annual meeting....BRK has got to be the only company whose annual meeting pays for itself!  Anybody know about other subs meeting sales?

[scorpioncapital]

This all seems part of a logical progression over many years

 

1. Create the B shares.

2. Split the B shares.

3. Buy back shares and/or pay a dividend.

 

 

[goldfinger]

From a CNBC article:

 

http://C

 

[goldfinger]

Sorry the attachement didn't work:

Here is the text:

 

What do you think? We want to know!

 

Are you more likely to buy shares of Berkshire Hathaway now that the stock is more accessibly priced?

Yes, until now it was too expensive for me.

No, it doesn't change a thing.

 

Vote to see results

Are you more likely to buy shares of Berkshire Hathaway now that the stock is more accessibly priced?  * 490 responses

Yes, until now it was too expensive for me.

71%

No, it doesn't change a thing.

29%

Not a Scientific Survey. Results may not total 100% due to rounding.

[arbitragr]

Split is having some effect ... BRK-B jumped up 4% today, when everything else was down.

 

[Ballinvarosig Investors]

Split is having some effect ... BRK-B jumped up 4% today, when everything else was down.

 

It's interesting, the price is probably going up in expectation that investors are going to pile into the B-shares once they're split. I think it might scupper a few plans if the newly split B-shares actually went down on the first few days of trading :D

 

Good luck to anyone who thinks they'll make money out of this.

[Alekbaylee]

It may also start a sell off of other "investor-wise" securities like MKL, LUK and FFH, toward the buying of new baby-BRK.B (post split).

[StubbleJumper]

Split is having some effect ... BRK-B jumped up 4% today, when everything else was down.

 

It's interesting, the price is probably going up in expectation that investors are going to pile into the B-shares once they're split. I think it might scupper a few plans if the newly split B-shares actually went down on the first few days of trading :D

 

Good luck to anyone who thinks they'll make money out of this.

 

 

I recently added a small amount to my BRK holding.  In some respects it is a "heads you win, tails you win" situation.  If there is a short-term price spike caused by the split, that's great because you can sell for a nice profit.  Otherwise, you get to hold a wonderful under-priced security in a company managed by the best capital allocator on the planet.

 

Seems like a sweet spot to me...

 

SJ

[benhacker]

I've been buying below $3300 and was a buyer on Friday and Tuesday.

 

The stock is cheap... the split is a catalyst, maybe nothing happens, or maybe it starts in motion a revaluation process.  Either way, BRK is cheap.  People buying today for the split (or because Buffett said the stock was cheap, or because he said that the Swiss Re deal was $50B worth of premium, etc) may or may not be stupid for the reason they are buying, but the bottom line for me is that the stock is cheap.

 

I own another stock that announced a 11:10 split a few months back.  We all talked about how stupid the split was and how management wasn't fooling anyone... and then the stock split... and the price didn't move.  The fact is that splits are nothing economic, but maybe, they can be a catalyst for cheap stocks.

 

I'm not saying they are, but in the case of BRK, all I know is it is cheap.  If the stock is at $3250, or $65... I'll buy some.  but I wouldn't be the least bit surprised to see it at $80 in a week.

 

Markets are crazy.

 

Ben

[arbitragr]

Check out BRK-B price action compared to the major indices.

 

Something fishy is going on.  :D

[MartinWhitman]

There`s a 13 minute Bloomberg video

 

http://www.bloomberg.com/avp/avp.htm?N=av&T=Buffett%20Says%20He%27s%20Not%20Done%20Making%20Deals%2C%20Seeks%20More&clipSRC=mms://media2.bloomberg.com/cache/vRkPc0Ybh2yE.asf

[Ballinvarosig Investors]

BRK up 5% after shares were split today.

[StubbleJumper]

BRK up 5% after shares were split today.

 

Yep, the little bit that I added last week at $3280 is already up about 9%.  Of course it probably needs to go up at least another 20% to get near intrinsic value....  I won't hold my breath!

 

SJ