Berkshire Hathaway stock hits new milestone at $ 200,000
Saturday, 16 August 2014 00:35
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REUTERS: Berkshire Hathaway Inc’s share price on Thursday surpassed and closed above $ 200,000 for the first time, the latest milestone for a company that Warren Buffett has built over nearly five decades into what some analysts view as a microcosm of the US economy.
Warren Buffett
Class A shares of Berkshire, which have never been split, closed up $ 3,500, or 1.8%, at $ 202,850, giving the Omaha, Nebraska-based company a market value of more than $ 333 billion. The share price had earlier rose as high as $ 203,025.
Berkshire’s share price has more than doubled since it first crossed the $ 100,000 barrier on 5 October 2006. The Standard & Poor’s 500 has climbed just 44% since that date. Buffett, who turns 84 on 30 August and is the world’s third-richest person, oversees a conglomerate with more than 80 businesses ranging from Geico car insurance to the BNSF railroad to Dairy Queen ice cream, and more than $ 119 billion of stocks such as Wells Fargo & Co and Coca-Cola Co.
In the second quarter, Berkshire Hathaway posted a record $ 6.4 billion profit, helped by a stock swap and growing earnings in many businesses, on revenue of $ 49.76 billion.
By some measures, Berkshire remains moderately priced, trading at about 1.4 times its book value, a measure of assets minus liabilities, in the most recent quarter. Buffett has said he will consider buybacks only at or below a 1.2 times multiple.
Berkshire also has lower-cost Class B shares, which Buffett launched in 1996 to thwart unit investment trusts purporting to be “clones” of Berkshire but which carried high costs.
Those shares now trade at about 1/1,500th of a Class A share and carry voting rights equal to 1/10,000th of a Class A share. They closed on Thursday up $ 2.22, or 1.7% at $ 135.30.
Since 2006, Buffett has been donating Berkshire shares to several charities. He still owns about one-fifth of Berkshire, which was a failing textile company before he took it over in 1965, and controls about one-third of its voting power.
Buffett’s net worth was about $66.3 billion after Thursday’s market close, Forbes magazine said.
