Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 10
The A-to-B ratio was pretty constantly only a hair above 1500 to 1 for pretty much all of 2019 and 2020. Also the first half of last year.
But about a year ago the ratio starting climbing pretty steadily, with figures now averaging over 1520 normal and stretches over 1530.
It's not all that important, but one wonders what the reason is.
One speculation:
The recent popularity of fractional share ownership has caused a lot of people to buy a fraction of an A share rather than plumping for B shares as they would have before.
Thus that tranche of incremental demand from people who never owned Berkshire before is going to A, not B.
Anyone have a better guess?
A graph of the ratio (only at close, not the best measure) in the last year and a half.
https://stockcharts.com/h-sc/ui?s=BRK%2FA%3ABRK%2F...The way to measure the ratio a bit more accurately is to take the ratio of midpoint of bid/ask for each class while the market is open.
Jim
No. of Recommendations: 0
Could the Bs being in the S&P 500 be part of this?
No. of Recommendations: 2
Could the Bs being in the S&P 500 be part of this?
It doesn't seem so--they have been in the index for some years now, and the ratio was pegged extremely close to 1500:1 for the first few years after that.
In fact, it was closer to 1500 after the index inclusion than it was years previously. The "old normal" for a long time (prior to the credit crunch, say) was about 1502.
Jim
No. of Recommendations: 2
This is the first I have heard about fractional ownership of A shares.
Is it fairly common?
How do they get voted?
Can you sell a fraction of your fraction or does it have to be sold in the same size as the purchase?
If one were to invest in BRK now and had access to fractional ownership and you could sell as much or as little of your fraction as you wanted then it seems you would be getting a bigger bang with the fractional A shares than with whole B shares.
This is my first post on this board so let me add my thanks to Manlobbi and to all who make this such an enjoyable place to visit.
No. of Recommendations: 6
This is the first I have heard about fractional ownership of A shares.
Is it fairly common?
How do they get voted?
Can you sell a fraction of your fraction or does it have to be sold in the same size as the purchase?
My understanding is that it is becoming relatively common, and you can buy or sell whatever fractions you like, any time you like.
My main broker (Interactive Brokers) has fractional shares now, following several other US brokers.
As for voting, my guess is that you don't get any, but that's just a guess.
Quite handy for creating your own "index fund", for someone who wanted to buy (say) all the Nasdaq 100 companies except the Chinese the VIE ones.
Several brokers offer not just fractional shares, but also "one button" rebalancing to whatever weights you like.
Jim
No. of Recommendations: 1
Some friends and I were wondering about the possible impact of fractional A shares on voting power. So one checked with his Schwab account. In their case, we learned that Schwab offers fractional shares of any stock in the S&P 500. But since BRK is only represented by the B shares in the index, they do not offer fractional shares in the A stock.
Do other brokers offer fractional A shares? And, if so, do they specify if fractional shares have any voting power?
Any info appreciated.
No. of Recommendations: 2
This is the first I have heard about fractional ownership of A shares.
Is it fairly common?
How do they get voted?
Can you sell a fraction of your fraction or does it have to be sold in the same size as the purchase?
If one were to invest in BRK now and had access to fractional ownership and you could sell as much or as little of your fraction as you wanted then it seems you would be getting a bigger bang with the fractional A shares than with whole B shares.
I had a Sharebuilder account I opened around 2003, remember them? The premise was you could put in any amount per month, and they'd use the entirety to buy a particular stock. They'd buy fractional shares with whatever money was left after purchasing whole shares. I don't think they did the program with A shares. When I switched brokers all my fractional shares had to be liquidated and only whole shares could move in kind. Etrade doesn't allow you to buy fractional shares of anything, so I don't think it's a standard offering from all brokers.
What I've read about how they're voted, is it varies by broker from not at all, to an internal system where they poll how all their owners want to vote their fractional portion of the share and then vote the whole shares accordingly. Berkshire itself doesn't recognize the fractional share owners as shareholders - the whole share is held by the Broker.
It's possible to end up with fractional shares even in brokerages who don't allow you buy them. One way is if you need to recharacterize already invested IRA contributions - that's how I ended up with some fractional B shares in Vanguard. Etrade says this about selling fractional shares:
"Selling fractional shares requires a market or limit order that is good for the day, and must include the full decimal quantity owned. Orders for less than one share must be market orders."
An A share can be converted to 1500 B shares by telling your broker that's what you want to do, so it's useful to think of an A share as 1500 B shares, but the A shares have much greater voting power, so they vote like 10,000 B shares. How much is the extra voting power worth? Warren Buffett has said A shares are the better deal as long as they don't trade for more than 2% over the cost of 1500 B shares. As a result of these forces, the A shares tend to trade between parity and a 2% premium to the B shares.
So I'd qualify your thoughts as you'd get a bigger bang with fractional A shares if they're trading for less than 1,530 B shares (2% more than 1500), and your broker allows you to vote the fractional shares.
No. of Recommendations: 2
So one checked with his Schwab account. In their case, we learned that Schwab offers fractional shares of any stock in the S&P 500. But since BRK is only represented by the B shares in the index, they do not offer fractional shares in the A stock.
Interesting.
I checked, and it's a similar problem at Interactive Brokers.
They have a long list of eligible shares - over 12000 tickers - but not BRK/A.
So, oddly, the share that one would most likely need to have a fractional purchase isn't available for fractional purposes.
At those brokers, anyway.
There was a comment a while back about the rising A volume, and another poster (forget who) suggested it may have been due to quirk in how fractional shares are reported.
So it's an interesting question whether ANY brokers are offering fractional A shares.
It seems like my speculation as to the reason for rising A volume doesn't wash.
Something is sure causing the reported volume to rise. The one month average reported volume is 6.5 times as high as it was 2 years ago, and it has been a steady climb.
The one-month average reported is 8% higher than a month ago, 15% higher than two months ago, 34% higher than three months ago, 49% higher than four months ago, and so on.
I wonder what it is?
Jim
No. of Recommendations: 1
I wonder what it is?
I'm hoping we'll find out tomorrow. I know there's one purchaser who's publicly stated they prefer the As to the Bs as long as they don't ask more than 2% more...
No. of Recommendations: 0
No. of Recommendations: 0
FWIW, Fidelity allows fractional trades for almost any US stock (maybe some ADRs as well), and Schwab for S&P 500 stocks.
Neither allows BRK/A fractions.
No. of Recommendations: 1
So it looks like Robinhood might be the only one?
They say (I paraphrase) pretty much any stock, just ask us to confirm.
Jim
