The Difference Between BRK.A and BRK.B
Berkshire Hathaway is one of the most well-known companies in the world, and the brainchild of investing legend Warren Buffett. The company is famous for its ability to make profitable investments and its stock has become synonymous with the success of its founder.
Berkshire Hathaway offers two types of shares, BRK.A and BRK.B. Both these shares are traded on the New York Stock Exchange, but they differ significantly in terms of price, market capitalization, and voting rights. In this article, we’ll take a closer look at the difference between BRK.A and BRK.B.
Price
When it comes to price, the difference between BRK.A and BRK.B is quite significant. As of this writing (2021), BRK.A is priced at around 5,000 per share, while BRK.B is priced at around 0 per share. This means that BRK.A is much more expensive than BRK.B, making it out of reach for most investors.
The reason for the price difference is that BRK.A has a much lower number of outstanding shares (just over 1,500). This means that each share of BRK.A represents a much larger portion of the company’s overall worth, which makes it more expensive.
Market Capitalization
Market capitalization (or market cap) is the total value of a company’s outstanding shares. It’s calculated by multiplying the number of outstanding shares by the current market price of each share. The market cap of a company can be used as an indicator of its size and overall worth.
Currently, the market cap of BRK.A is over 0 billion, making it one of the largest companies in the world. On the other hand, the market cap of BRK.B is just under 0 billion, still impressive, but significantly smaller than BRK.A.
Voting Rights
One of the main differences between BRK.A and BRK.B is the voting rights that come with each share. BRK.A shares come with more voting rights than BRK.B shares, which means that investors who hold BRK.A have more say in the running of the company.
BRK.A shares come with 1/10,000th of a vote per share, while BRK.B shares come with 1/1,500th of a vote per share. In other words, it takes many more shares of BRK.B to have the same voting power as a single share of BRK.A. This means that while BRK.B investors can still vote on important matters related to the company, they don’t have as much influence as BRK.A investors.
Differences in Liquidity
Another difference between BRK.A and BRK.B is their liquidity. Liquidity refers to how easily a stock can be bought and sold on the open market. In general, more liquid stocks are easier to trade, and traders can buy and sell large quantities of shares without significantly affecting the stock’s price.
BRK.A shares are much less liquid than BRK.B shares. This is because BRK.A shares are much more expensive, and they are also owned by a relatively small number of wealthy individuals and institutional investors. This means that there are fewer BRK.A shares available to trade on the open market, and it’s harder to buy and sell large quantities of shares without affecting the stock’s price.
On the other hand, BRK.B shares are much more liquid than BRK.A shares. This is because they are more affordable, and they are owned by a much larger number of individual investors. This means that there are more BRK.B shares available to trade on the open market, and it’s easier to buy and sell large quantities of shares without significantly affecting the stock’s price.
Conclusion
In summary, BRK.A and BRK.B are two types of shares offered by Berkshire Hathaway, one of the world’s largest and most successful companies. BRK.A shares are much more expensive than BRK.B shares, and they come with more voting rights. On the other hand, BRK.B shares are more accessible to average investors and are more liquid than BRK.A shares.
Overall, both types of shares offer investors an opportunity to invest in one of the most successful companies in the world, and their choice of which to invest in will depend on their budget, their investment goals, and their desire for voting power.
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Difference Between Brk.A And Brk.B
