Berkshire Hathaway shares hit US$200k

LUCIANA LOPEZ AND JONATHAN STEMPEL
Last updated 12:32 15/08/2014

Relevant offers

World

US economic growth surges Man wakes from coma thinking he is Matthew McConaughey Informal capital controls arrest Russian rouble's slide Judge approves record $500m settlement over deadly Kilmore East-Kinglake Black Saturday bushfires China boom turns down Man to pay $1.9 million to victims of credit card fraud Russia's economic reality shirtfronts Vladimir Putin Fed confident on US growth Avon pleads guilty to China bribes Sea Shepherd intercepts boat suspected of illegal fishing

Berkshire Hathaway share price has surpassed and closed above US$200,000 (NZ$235,000) for the first time, the latest milestone for a company that Warren Buffett has built over nearly five decades into what some analysts view as a microcosm of the US economy.

Class A shares of Berkshire, which have never been split, closed up US$3,500, or 1.8 per cent, at US$202,850, giving the Omaha, Nebraska-based company a market value of more than US$333 billion. The share price had earlier risen as high as $203,025.

Berkshire's share price has more than doubled since it first crossed the US$100,000 barrier on Oct. 5, 2006.

The Standard & Poor's 500 has climbed just 44 per cent since that date.

Buffett, who turns 84 on August 30 and is the world's third-richest person, oversees a conglomerate with more than 80 businesses ranging from Geico car insurance to the BNSF railroad to Dairy Queen ice cream, and more than US$119 billion of stocks such as Wells Fargo and Coca-Cola.

In the second quarter, Berkshire Hathaway posted a record US$6.4b profit, helped by a stock swap and growing earnings in many businesses, on revenue of US$49.76b.

By some measures, Berkshire remains moderately priced, trading at about 1.4 times its book value, a measure of assets minus liabilities, in the most recent quarter. Buffett has said he will consider buybacks only at or below a 1.2 times multiple.

Berkshire also has lower-cost Class B shares, which Buffett launched in 1996 to thwart unit investment trusts purporting to be "clones" of Berkshire but which carried high costs.

Those shares now trade at about 1/1,500th of a Class A share and carry voting rights equal to 1/10,000th of a Class A share. They closed on Thursday up US$2.22, or 1.7 per cent. at US$135.30.

Since 2006, Buffett has been donating Berkshire shares to several charities. He still owns about one-fifth of Berkshire, which was a failing textile company before he took it over in 1965, and controls about one-third of its voting power.

Buffett's net worth was about US$66.3 billion after Thursday's US market close, Forbes magazine said. 

Ad Feedback

- Reuters

Special offers

Featured Promotions

Sponsored Content