Of course! Let's dive into the fascinating world of Berkshire Hathaway's shares. It's a topic that can seem a bit complex at first, but with a step-by-step guide, we'll break it down so you can understand it clearly.
A Comprehensive Guide to Understanding Berkshire Hathaway's Shares
Are you ready to explore the unique share structure of one of the world's most successful and enduring companies? Great! Let's get started on this journey to unravel the mystery of how many shares of Berkshire Hathaway exist.
Step 1: The Tale of Two Classes
Before we get to the numbers, it's crucial to understand that Berkshire Hathaway isn't just one type of share. The company, under the masterful leadership of Warren Buffett and his late partner Charlie Munger, has a unique two-class share structure: Class A (BRK.A) and Class B (BRK.B).
Think of it like this: Imagine a single, magnificent cake. The Class A shares are like the original, huge slices, each with a piece of the valuable filling and a lot of the frosting (voting power). The Class B shares are like smaller, more affordable cupcakes made from the same ingredients, designed to be more accessible to a wider audience.
Why did they do this? Warren Buffett, a strong advocate against stock splits, wanted to keep the price of the original Class A shares high to attract long-term, committed investors. However, as the company grew and the share price skyrocketed, he realized that many smaller investors were being priced out. To prevent "investment trusts" from creating their own imitation of Berkshire by buying up shares, Buffett introduced the more affordable Class B shares in 1996.
This is a key point to grasp: The Class A shares are the original shares, while the Class B shares were created later to provide an alternative for investors who couldn't afford the sky-high price of a single Class A share.
Step 2: Unveiling the Numbers - How Many Shares Exist?
Now that you know about the two classes, let's look at the numbers. It's important to note that the number of outstanding shares can change over time due to share buybacks. Berkshire Hathaway is known for repurchasing its own stock when it believes the shares are trading below their intrinsic value, which reduces the number of outstanding shares.
Sub-heading: Class A (BRK.A) Outstanding Shares
The Class A shares are the behemoths of the stock market. With a price per share that can reach hundreds of thousands of dollars, these are truly for the dedicated, long-term investor. As of late 2024 and early 2025, the number of outstanding Class A shares is remarkably low.
According to recent data, there are approximately 730,000 to 1.44 million Class A shares outstanding. The exact number can fluctuate slightly based on buybacks, but it remains a very small number compared to most publicly traded companies. This scarcity is a testament to the company's value and Warren Buffett's philosophy of avoiding stock splits.
Sub-heading: Class B (BRK.B) Outstanding Shares
In contrast, the Class B shares are much more numerous. They are far more liquid and accessible to the average retail investor.
As of late 2024 and mid-2025, the number of outstanding Class B shares is in the billions. Recent sources show the number to be around 2.15 billion shares. This vast number makes the BRK.B shares a much more common sight in brokerage accounts around the world.
Step 3: The Conversion Ratio - A One-Way Street
Here's where things get interesting and you need to pay close attention. While there are two classes of shares, they are not a perfect two-way street when it comes to conversion.
The conversion ratio is: 1 BRK.A share can be converted into 1,500 BRK.B shares.
This is a one-way conversion privilege. You can convert a Class A share into 1,500 Class B shares, but you cannot convert Class B shares back into Class A shares. This mechanism helps maintain the price relationship between the two classes. If the price of a Class B share were to rise above 1/1500th of a Class A share, an arbitrage opportunity would exist where an investor could convert a Class A share into 1,500 Class B shares, sell them, and pocket the difference, which would push the prices back into alignment.
This conversion feature is a crucial part of Berkshire Hathaway's financial engineering, ensuring a certain level of price parity between the two classes.
Step 4: Voting Rights and Value - The Key Differences
Beyond the price and the number of shares, there are two other critical distinctions between the two classes: voting rights and economic value.
Sub-heading: Voting Rights
This is where the difference is most pronounced.
A Class A share gives the holder one vote.
A Class B share gives the holder 1/10,000th of a vote.
This means that even though a Class A share can be converted into 1,500 Class B shares, its voting power is much greater. The purpose of this structure is to ensure that the core control of the company remains with long-term, committed shareholders, particularly Warren Buffett and his inner circle.
Sub-heading: Economic Value
Despite the difference in voting rights and price, the economic value is proportional. This means that if Berkshire Hathaway were to pay a dividend, a Class A share would receive 1,500 times the dividend of a Class B share. However, it's important to remember that Berkshire Hathaway has famously not paid a dividend in decades, choosing instead to reinvest its earnings back into the business.
So, in terms of ownership of the underlying assets, 1 Class A share is economically equivalent to 1,500 Class B shares.
10 Related FAQ Questions
Here are some frequently asked questions about Berkshire Hathaway's shares, with quick and clear answers.
1. How to buy Berkshire Hathaway Class A shares? To buy BRK.A shares, you need to use a brokerage account that supports trading stocks on the NYSE. Due to the high price, you would need a substantial amount of capital, as fractional shares of BRK.A are generally not available.
2. How to buy Berkshire Hathaway Class B shares? BRK.B shares are much more accessible and can be purchased through any major brokerage account. The lower price per share makes it easier for most retail investors to buy whole shares or even fractional shares, depending on the brokerage.
3. How to convert Berkshire Hathaway Class A to Class B? The conversion process is handled through your brokerage. You would need to submit a request to your broker to convert your BRK.A shares into BRK.B shares at the 1:1500 ratio.
4. How to calculate the total market capitalization of Berkshire Hathaway? You can calculate the total market capitalization by multiplying the current price of each class of stock by its number of outstanding shares and then adding the two values together. Total Market Cap = (BRK.A price x BRK.A outstanding shares) + (BRK.B price x BRK.B outstanding shares)
5. How to tell the difference between BRK.A and BRK.B shares? The most obvious difference is the ticker symbol: BRK.A for Class A and BRK.B for Class B. The prices are also vastly different, with BRK.A trading at a much higher price than BRK.B.
6. How to find the most up-to-date number of outstanding shares? You can find the most recent outstanding share count in Berkshire Hathaway's quarterly and annual reports, filed with the U.S. Securities and Exchange Commission (SEC). These are available on the company's investor relations website and the SEC's EDGAR database.
7. How to understand the voting rights of each share class? Think of it this way: Class A shares are for investors who want a say in the company's affairs, while Class B shares are for investors who want to own a piece of the company without the significant voting power.
8. How to determine which share class is right for me? If you have a large amount of capital and want full voting rights, Class A might be for you. If you are a retail investor looking for a more affordable way to own a piece of Berkshire Hathaway, Class B is the clear choice.
9. How to understand the impact of share buybacks on outstanding shares? When Berkshire Hathaway buys back shares, it reduces the total number of shares available in the market. This can increase the value of the remaining shares by making each share represent a larger ownership stake in the company.
10. How to attend the Berkshire Hathaway annual meeting? Both Class A and Class B shareholders are entitled to attend the legendary annual shareholder meeting in Omaha, Nebraska, often referred to as "Woodstock for Capitalists." Your stock ownership serves as your ticket to this famous event.