Berkshire Hathaway Class A ꦑvs. Class B Shares: An Overvi꧑ew

Investors interested in buying shares of Warren Buffett’s Berkshire Hathaway Inc. behemoth have two options: Class A stock (BRK.A) or Class B stock (BRK.B). Class B shares offer ✃a smaller slice of the company at a co🅺rrespondingly small price per share.

On April 22, 2025, the company’s Class A shares closed at an eye-watering $780,000 per share. The Class B shares closed at $520.79 on the same day.

Berkshire History and the Introduction🌞 of Class B Shares

Berkshire Hathaway was content with its highly valued single class of stock. But the market demanded a lower-priced nibble at the Berkshire pie, at a time when the shares were trading for about $32,000.

In 1996, Chief Executive Officer 澳洲幸运5官方开奖结果体彩网:Warren Buffett and the board responded by issuing 517,500 shares of Class B shares. This allowed investors to buy shares for 1/30th of the price (and the equity stake) of a 澳洲幸运5官方开奖结果体彩网:Class A share of stock.

A 50-to-1 澳洲幸运5官方开奖结果体彩网:stock split in 2010 sent the ratio to 1/1,500th, which means each share of a Class A common stock was convertible to 1,500 shares of Class B common stock.

Class B shares carry correspondingly lower 澳洲幸运5官方开奖结果体彩网:voting rights as well. 澳洲幸运5官方开奖结果体彩网:Class B shares now carry 1/10,000th of the voting power of Class A shares.

Buffett marketed Class B shares as a long-term investment and an open-ended offering to prevent 澳洲幸运5官方开奖结果体彩网:volatility as a result of supply concerns.

Why 2 Share Classes?

Class B shares were introduced to allow individual investors to purchase the stock directly instead of buying a sliver of a share through unit trusts or 澳洲幸运5官方开奖结果体彩网:mutual funds that mirror Berkshire Hathaway’s holdings.

Buffett explained the 🐬act🌌ion in his 1996 annual letter to shareholders:

“As I have told you before, we made this sale [of Class B] in response to the threatened creation of unit trusts that would have marketed themselves as Berkshire look-alikes. In the process, they would have used our past, and definitely non-repeatable, record to entice naïve small investors and would have charged these innocents high fees and commissions.”

If the stock was left in the hands of 澳洲幸运5官方开奖结果体彩网:unit trusts, “Berkshire would have been burdened with both hundreds of thousands of unhappy, indirect owners (trust holders, that is) and a stained reputation.”

Key Differences

Buffett insists that Class A shares will never undergo a 澳洲幸运5官方开奖结果体彩网:stock split. He believes the high share price attracts like-minded investors focused on long-term profits rather than on short-term price fluctuations.

Along with being more accessible to retail investors, Class B shares give investors some flexibility. If an investor owns just one share of Class A and needs some cash, the only option is to sell that s♊ingle share, even if its price far exceeds the amount of money they nee🐭d.

Class B also provides a potential 澳洲幸运5官方开奖结果体彩网:tax benefit: The lower price means that a moderate amount of Class B stock can be transferred to family members without triggering the gift tax, which is owed on gifts valued at more than $19,000 per recipient as of 2025.

One final difference is that Class A shares can be 澳洲幸运5官方开奖结果体彩网:converted into an equivalent amount of Class B shares anytime a Class A shareholder wishes to do so. The 澳洲幸运5官方开奖结果体彩网:conversion privilege does not exist in reverse. Class B shareholders can only convert their holdings to Class A by selling their Class B shares and then buying the equivalent in Class A.

Advantages and Disadvantages of 🦄Berkshire Hathaway Class A and Class B Shares

Given the astronomical price of Class A shares, most in💧vestors do not have much of an option if they want to invest in Berkshire Hathaway.

For the lucky few who do ha✱ve ♈that option, there are a few pros and cons of each to keep in mind.

Advantages

Class A shares historically tend to slightly outperfor𓃲m Class B shares, though this is by no means a guaranteed outcome in the future.

Class A shares offer a long-term investment, and basically 澳洲幸运5官方开奖结果体彩网:no chance of a stock split down the line.

Investors looking for flexibility might prefer to invest in ꦆBerkshire’s Class B shares. They can add to their stake or trim it from time to time without dealing in the six-figure numbers that a single Class A share represents.

Disadvantages

The most obvious drawback to investing in B❀erkshire Hathaway is the price of th♔e Class A share. It’s simply beyond the means of the average investor.

Even a mutual fund or an 澳洲幸运5官方开奖结果体彩网:exchange-traded fund (ETF) that owns 🔥Class A shares won’t get you the equivalent of a single share of this stock without a massive investment.

The Bottom Line

Berkshire Hathaw𝐆ay’s Class A shares are among the world’s most coveted stocks. But their hefty price tag🌺 puts them well out of the reach of the average investor.

If you’re looking for a way to reap the benefits of investing༺ in the company, consider Berkshir🐼e’s Class B shares. As with any other investment venture, make sure they align with your goals and investment philosophy.

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