Berkshire Hathaway shares topped $500,000 each—here's why Warren Buffett says he'll never split the stock (via CNBCMakeIt)
Buffett about a potential stock split, which is when a company divides up its shares to lower their price and increase the overall amount of shares available.in 1996, priced at a substantially more affordable $341 as of Thursday afternoon, but has consistently refused to split the company's original class A offering.
It is because of this refusal, not in spite of it, that the company has had such a strong track record in growing its value, Buffett has argued.Buffett acknowledged that having such a high-priced stock — at the time, it was trading around $25,000 per share — could be "anywhere from awkward to disadvantageous" for investors, especially when it comes to gifting shares. But he said that the barrier to entry was intentional.
"We want to attract shareholders who are as investment-oriented as we can possibly obtain, with as long-term horizons," he said. If Berkshire were to split the stock and lower its price, "we would get a shareholder base that would not have the level of sophistication and the synchronization of objectives with us that we have now."
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