Warren Buffett, the CEO of Berkshire Hathaway, is receiving an early birthday present as the company’s class A stock reached a record high. With a 15% stake in the company, Buffett’s holdings are now valued at an impressive $118 billion.
Buffett, who has been at the helm of Berkshire Hathaway since 1965, will be celebrating his 93rd birthday on August 30. The class A stock saw a 1.4% increase to $541,000, surpassing the previous closing peak of $539,180 set on March 28, 2022.
While the class A stock reached new heights, the class B stock also saw a slight increase of 0.8% to $353.81. However, it remains about 1.5% below its peak of $359.57, also set on March 28, 2022.
So why did the class A stock hit a record high while the B shares didn’t? The class A stock is now trading at a roughly 2% premium compared to the B shares, whereas they were trading at parity in March 2022.
Berkshire Hathaway now boasts a market value of approximately $780 billion, making it the eighth largest company by stock market capitalization. It follows tech giants like Apple, Microsoft, Alphabet, Amazon.com, Nvidia, Tesla, and Meta Platforms.
This year alone, Berkshire’s class A stock has seen a solid 15% increase and has surged over 25,000-fold from its initial price of $20 when Buffett took control of the company in 1965. Remarkably, the A shares have never been split during Buffett’s tenure.
Currently, the stock is trading at about 1.5 times its estimated book value as of June 30 and at around 23 times the projected earnings for 2023. Investors eagerly await the company’s second-quarter earnings report, which is set to be released on Saturday.
Berkshire CEO Buffett’s Philanthropic Endeavors
Berkshire CEO Warren Buffett has made a significant commitment to philanthropy by pledging to donate his stock to various foundations. This charitable journey began in 2006, when he initiated donations to five designated foundations. The prominent recipient among these foundations is the Bill and Melinda Gates Foundation, while the remaining four are associated with his three children.
In June, Buffett announced his annual gift to these foundations, totaling an impressive $4.5 billion. The donations consisted of Berkshire stock, reflecting Buffett’s steadfast dedication to his philanthropic efforts.
For the past 17 years, Buffett has refrained from buying or selling any A or B shares of Berkshire. He maintains this unwavering stance, attributing his consistent support to the five foundations. Their collective worth surpassed an astounding $50 billion, surpassing his net worth in 2006. It is important to note that Buffett holds no debts and retains remaining A shares valued above $112 billion, constituting over 99% of his net worth.
Buffett humbly acknowledges that his remarkable wealth accumulation is not solely a result of extraordinary events at Berkshire. Rather, it is the product of sensible decision-making guided by a long-term vision, bolstered by the American economic climate and the power of compounding effects. In light of this, Buffett’s will stipulates that more than 99% of his estate will be utilized for philanthropic endeavors.
As for the stock that remains undonated at the time of Buffett’s passing, it will be distributed over the next decade or so to ensure its contribution to causes he deeply cares about.