Berkshire Hathaway Chairman and CEO Warren Buffett.
Andrew Harnick | AP
Berkshire Hathaway’s Class A shares reached a key milestone on Wednesday, hitting an all-time closing high of half a million dollars, as Warren Buffett’s multi-faceted conglomerate is at full blast during the economic recovery.
Class A shares rose 1.3% on Wednesday, advancing for the fourth straight day to close at $504,400, the first-ever close above the $500,000 threshold. Shares of the Omaha-based company are up more than 11% this year, well ahead of the broader market.
“I think the stock rotation, coupled with Berkshire’s presence in energy and utilities … and investor enthusiasm for Berkshire’s aggressive buybacks, have weighed on the stock’s performance,” said Cathy Seifert, Berkshire analyst at CFRA Research.
The stock rally propelled Berkshire to a market capitalization of over $730 billion, surpassing tech pioneer Meta Platforms in market value and becoming the only non-tech company on the list of the 10 most valuable US public companies.
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Berkshire’s Class A stock is the conglomerate’s original offering, which quickly rose in value over time and eventually became one of the most valuable stocks on Wall Street. Buffett has said he will never split A shares because he believes a high share price will preserve and attract more long-term, quality-oriented investors.
However, in response to small investor demand for a cheaper option, Berkshire issued Class B convertible shares in 1996 at an initial price of one-thirtieth the value of Class A shares. The available class of shares allows investors to purchase a portion of the company outright rather than buying a fraction of the shares. through mutual funds or mutual funds.
Berkshire’s Class B shares closed Wednesday at $336.11 a share, up a similar 12% this year.
The company’s operating income, which includes earnings generated from a variety of businesses owned by the conglomerate such as insurance, railroads and utilities, jumped 45% year-over-year in the fourth quarter as businesses continued to recover from the economic slowdown caused by pandemic.
Plenty of Buffett’s stocks are also doing well, from Apple to big banks to Japanese trading houses. The 91-year-old legendary investor’s massive bet on Apple, which makes up 40% of Berkshire’s stock portfolio, was more than $120 billion on paper.
Meanwhile, Berkshire bolstered the stock even further, buying back a record $27 billion of its own shares in 2021 as the Oracle of Omaha found few opportunities outside the company. The conglomerate hasn’t made major acquisitions in recent years, so it’s constantly buying back its own shares with its huge pile of cash.