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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: RaplhCramden ✭  😊 😞
Number: of 22353 
Subject: Re: Attractiveness of Price
Date: 06/15/24 5:15 PM
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To be clear, I'm not debating anything. I'm simply acknowledging my ignorance by expressing curiosity as to how a fixed 1500 to 1 ratio accommodates differing A and B share buyback values. In my simplistic understanding a dollar is worth 4 quarters only so long as both are equivalent in value. No offense intended.

Very politely asked!

The 1500:1 exactly economic ratio means things like:
1) If a $1 dividend was declared on B shares, Berkshire would necessarily have to declare a $1500 dividend on A shares
2) If berkshire were to spin out Dairy Queen by issuing shares in Dairy Queen to currently shareholders in Brk, and it spun out 1 DQ share per B share owned, it would necessiarly have to offer 1500 DQ shares per A share owned.
3) If Berkshire was liquidated, and the proceeds were distributed to shareholders, if the proceeds were $400 for each B share held, the proceeds would necessarily be $600000 for each A share held.

Further
4) any A share holder always has the right to hand in their A share to BRK and receive in return 1500 B shares. The reverse is not the case, you cannot "buy" an A share from Berkshire using 1500 B shares.

Given all these official constraints, the people who own A and B shares are still free to sell them or buy them at whatever prices they can negotiate with their counterparties. And apparently that ratio is typically a bit above 1500.

R:)
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
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