Finance History | New York Stock Exchange, 21 January 2010 — Fifty Class B Shares Replaced One

At the opening of New York Stock Exchange trading on 21 January 2010, Berkshire Hathaway's 50-for-1 split of its Class B common stock became effective. Each pre-split Class B share became 50 shares, so the change divided the same aggregate ownership interest into smaller units. Berkshire's Class A shares were not split. The split reduced the market price represented by one Class B share without creating business value by itself. A holder had fifty times as many shares, while each share represented one-fiftieth of the former economic interest. Berkshire also adjusted the conversion relationship. Beginning that day, one Class A share could be converted into 1,500 Class B shares, compared with 30 Class B shares before the split. Voting power changed proportionately for the smaller units. Each Class B share carried one ten-thousandth of the vote of a Class A share after the split, preserving the pre-split aggregate voting relationship for an owner who received all 50 new shares. The par value of each Class B share fell from approximately US$0.1667 to approximately US$0.0033 in 2010 dollars. Par value was an accounting and legal amount rather than the trading price or intrinsic value. The timing was tied to Berkshire's acquisition of Burlington Northern Santa Fe. Smaller Class B units made it practical to deliver Berkshire shares as consideration to BNSF holders whose allocations could not be met conveniently with the much higher-priced Class A stock. The change also made a single Berkshire unit accessible at a lower nominal price, although access did not remove investment risk or guarantee liquidity. Market capitalization still depended on price multiplied by the larger number of outstanding shares. The New York Stock Exchange anchors the event because split-adjusted Class B shares began trading there on the effective date. The Broad Street facade marks a capital-structure change that altered denominations, conversion ratios and per-share votes while leaving the underlying Berkshire businesses and each continuing holder's proportional economics unchanged. Photo: Beyond My Ken, CC BY-SA 4.0, via Wikimedia Commons.