Small Investors, Rejoice: Berkshire Hathaway Stock to Split 50-to-1
Berkshire introduced the (relatively) lower priced Class B shares in 1996 in order to allow smaller investors to gain entry to the company. The Class A shares, which won't split, currently go for about $103,000 a pop.
The high price of both classes of stock have helped protect Berkshire from what Buffett calls "inferior buyers," since the cost of a single share made the stock difficult to trade rapidly and proved too pricey for most retail investors. But at $67, the Class B shares will likely see large increases in both volume and volatility.
The split was necessitated by Berkshire's November agreement to buy the 77% of Burlington Northern it doesn't already own. Berkshire is paying $100 a share, with 60% in cash and 40% in Class B stock. By splitting the stock, Berkshire is essentially breaking a large-denomination bill into a big pile of small change to simplify the stock portion of the purchase.