Is Baby Buffett a bargain?
Of course, that's Warren's B shares. Most of us can still only fantasize about owning Berkshire's A stock, which last traded at $114,950 a share.
But is it still a good deal? So far, yes. The B shares have shot up 5.46% since the split, at a time when the Standard & Poor's 500 sank 3.4%.
Stock splits do absolutely nothing to change the fundamentals of the company. If you owned one share of the B stock before the split, you now own 50 at 1/50th of the value. But the split does seem to have given a psychological boost to the stock, as well as making it more affordable to the masses.
The split also means it is now being widely traded, a requirement for the company to be included in the S&P 500. Berkshire is expected to be added to the blue-chip index after market close today, once Buffet's deal to purchase railroad Burlington Northern Santa Fe is completed. The merger is expected to close today.