Long live until Berkshire Hathaway Class A stock split.
Buffett joked about his right-hand man and best friend Charlie Munger in 2011. 11 years later, Buffett still sticks to his value investing strategy and draws a line on his stock split plan.
According to CNBC on the 17th, Buffett said, “I want to attract shareholders with an investment-oriented and long-term view. If the stock price is lowered through a stock split, it will not be easy to maintain the current target level.”
As Warren Buffetts Berkshire Hathaway Class A stock broke the $500,000 mark, the stock rose to a whopping 620 million won in a week.
Typically, when a stock price rises too high, companies split the stock to attract small investors. Examples include Apple, Tesla, Alphabet, and Amazon. Most recently, on the 9th, Amazons board of directors decided to split its existing stock into 20 shares.
Buffett, on the other hand, insists on sticking to a long-term and value investing strategy.
Buffett also told investors that “holding a cheaper stock is not an incentive unless it creates intrinsic value.” “People think they should invest when stock prices rise, but I think they should invest when the intrinsic value of a company rises,” he added.
Instead, in the past, Buffett took the existing stock as A-share and issued B-share at 1/30 the price of A-share in 1996.
According to Google Finance data on that day, Berkshire Hathaways Class B market capitalization was $763.8 billion and Class A market capitalization was $742.6 billion, ranking 7th and 8th in market capitalization of U.S. listed companies, respectively.