Berkshire Hathaway: Class A vs. Class B Shares

Understanding the Difference

Berkshire Hathaway, led by investment guru Warren Buffett, offers two classes of shares: Class A (BRK.A) and Class B (BRK.B). While both classes provide ownership in the company, they differ significantly in price, voting rights, and convertibility.

Price Disparity

The most noticeable difference between BRK.A and BRK.B is their price. As of July 17, 2023, BRK.A shares closed at $523,500 per share, while BRK.B shares closed at $345.80. This vast price gap makes BRK.A one of the most expensive stocks in the world, accessible only to high-net-worth investors.

Voting Rights and Convertibility

Another key difference lies in voting rights. BRK.A shares have one vote per share, while BRK.B shares have 1/10th of a vote per share. This gives BRK.A shareholders significantly more influence in company matters. However, BRK.B shareholders can exchange their shares for BRK.A shares on a one-for-150 basis, providing them with a path to increased voting power over time.

Conclusion

The choice between BRK.A and BRK.B shares depends on individual investment goals and financial capabilities. BRK.A shares offer higher voting rights and a potentially more significant return on investment for those who can afford their premium price. BRK.B shares provide a more accessible entry point for investors seeking exposure to Berkshire Hathaway but with a lower level of voting power and a more modest potential return. Ultimately, the decision between these two share classes is a matter of weighing the value of voting rights against the cost of acquisition.