Subject: Re: Rational Walk on BRK/BHE
I agree that Buffett likely set rational parameters to evaluate Abel's and Scott's minority shares and offered to repurchase them at a fair price, so I agree with RW's conclusion : BHE's valuation has dropped, almost by half, given the current regulatory uncertainties, ...

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Bear in mind that there may be a simpler explanation. The parties may have agreed long ago on a valuation formula for the private shares, which would likely have had a heavy weighting to something like recent free cash flow or net earnings.


I think we are saying the same thing. There are parameters like free cash flow and earnings that have taken a big hit from regulatory decisions, and there is probably a prior agreement to use these valuation parameters to set the price at which Berkshire would repurchase the minority shares.


Has anyone done the math with all the moving parts (including the BRK share exchange at current market prices) to come up with the implied valuation for the whole of BHE?

Yes, Rational Walk's assessment is that the deal, including the BRK.B shares issued and the price paid for the debt, amounts to a total valuation of $48.9 b, way down from the implied $88.8b valuation that Abel got for his shares 2 years ago. https://rationalwalk.com/berks...