Tags: warren buffett | berkshire hathaway | share price | stock

Buffett's Berkshire Hathaway Tops $250,000 a Share

(Getty/Paul Morigi)

By    |   Tuesday, 13 December 2016 02:50 PM

The Class A shares of Warren Buffett's Berkshire Hathaway topped $250,000 for the first time ever.

The milestone happened 54 years and a day after Buffett bought his first Berkshire shares and began the march toward turning the company into a giant, CNBC reported.

The move comes in an overall strong year for the stock, which has surged since the Nov. 8 election. Shares peaked at $250,419.50. In late Tuesday trading, the stock was at $249,676.28, up $787.59, or 0.32 percent on the NYSE. Berkshire stock pierced the $1,000 level in 1983, passed $10,000 in 1992 and hit $100,000 for the first time in 2006.

Berkshire has jumped about 8 percent in New York trading since Trump won the Nov. 8 election, helped by the increasing value of Buffett’s holdings in bank stocks as interest rates climbed.

Buffett bought his first shares at $7.50, which would be $60.03 in 2016 dollars. He acquired more than half ownership by 1965.

For the year, the company's stock is up about 26.2 percent, part of a rally that has the Dow Jones industrial average knocking on the door of 20,000, CNBC reported.

Buffett has refused to split the A shares on the belief that he wants only serious investors involved with the company, CNBC reported. Buffett, who began buying Berkshire shares in late 1962, holds 18 percent of the class A-shares, with a market value at just shy of $73 billion as of the end of Monday trading.

At a quarter million dollars per share, Berkshire Class As are the most expensive publicly traded equities in the U.S., The Wall Street Journal explained.

"Back when Buffett took the reins, Berkshire was a struggling textile company. He has transformed it into a massive conglomerate that runs a railroad, operates power plants, makes airplane parts, and owns trucking companies, car dealerships, real estate brokers, jewelry stores and much, much more. If Berkshire’s wholly-owned companies were independent, ten of them would be among the Fortune 500," the Journal explained.

 

Some units are household names, like Dairy Queen, Fruit of the Loom, Benjamin Moore & Co. and car insurer Geico Corp. Others operate in relative obscurity but rake in billions of dollars in revenue each year.

 

Meanwhile, Berkshire could get a $29 billion boost to its book value under tax-rate cuts advocated by President-elect Donald Trump, according to Barclays Plc.

“We would view this magnitude of increase as favorable for Berkshire shares since it is generally valued on price to book value,” Barclays analysts led by Jay Gelb said in a note to investors Monday.

The prospect of lower taxes is also helping. Gelb’s analysis covered a net deferred tax liability of about $50.4 billion at the end of 2015, a figure that includes potential costs if Buffett sells investments that gained in value, Bloomberg reported.

The review doesn’t take into account the DTLs at some energy operations, where benefits wold be enjoyed by utility customers and not Berkshire shareholders.

The value of the liability is based on the current 35 percent tax rate and would fall by about $22 billion at a 20 percent corporate tax rate and drop by $29 billion at 15 percent, Gelb wrote. Trump has called for cutting the business tax rate to 15 percent, while the House Republican “blueprint” for tax changes proposes 20 percent.

(Newsmax wire services contributed to this report).

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The Class A shares of Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) topped $250,000 for the first time ever.
warren buffett, berkshire hathaway, share price, stock
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2016-50-13
Tuesday, 13 December 2016 02:50 PM
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