# Berkshire Hathaway (BRK-A) vs (BRK-B): A stock question **URL:** \ **Category:** Factual Questions\ **Created:** [December 28, 2007, 4:24pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479 "2007-12-28T16:24:08Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![Tastes\_of\_Chocolate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tastes_of_chocolate/32/3232_2.png) [@Tastes\_of\_Chocolate](https://boards.straightdope.com/u/Tastes_of_Chocolate)\ **Post date:** [December 28, 2007, 4:24pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/1 "2007-12-28T16:24:08Z")
On the New York stock exchange, there are 2 Berkshire Hathaway stocks listed. BRK-A (at $139,600/share) and BRK-B (at $4,625/share). Other then a huge difference in share cost, the 2 stocks almost exactly track each other, for the 18 years I can see. So what is the difference between the stocks? ---
**Author:** ![Crusoe](https://avatars.discourse-cdn.com/v4/letter/c/49beb7/32.png) [@Crusoe](https://boards.straightdope.com/u/Crusoe)\ **Post date:** [December 28, 2007, 4:27pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/2 "2007-12-28T16:27:43Z")
From a quick web search - can’t vouch for the source, but it doesn’t sound unreasonable: > [@](#): > > The two types of shares are essentially the same, except for the cost. Warren has refused to split the shares (in the traditional sense) to get a lower share price and reports that Berkshire wants a very different type of shareholder (in for the long run, minimally concerned about daily price fluctuations, and minimal transactions) and the high price associated with Class A shares maintains this. > > Berkshire started to offer the Class B shares after (1) stockholders wanted a mechanism to gift shares to family members, and the gift tax limit is $10,000 ( so in the beginning you could gift a Class A share and it was less than 10K, but as the price rose this became impossible) and (2) private funds were getting ready to buy the Class A shares and then sell fractional interests via their fund. > > Warren wanted to accomondate the first and prevent the second. > > The floor manager for the Berkshire shares on the trading floor works to keep one Class B share = 1/30th of a class A share. It is not always a perfect 1/30th but it is often very close. > > Berkshire also wants the price of the share to accurately reflect the underlying value of the business, and thus have minimal fluctuations. > > The Class A shares also have a bigger voting right than the Class B shares (memory tells me that the Class B shares have a 1/200th of a vote even though they are about 1/30th in price). ([from here](http://socialize.morningstar.com/NewSocialize/asp/FullConv.asp?forumId=F100000079&convId=175721)) ---
**Author:** ![MrFloppy](https://avatars.discourse-cdn.com/v4/letter/m/43a26b/32.png) [@MrFloppy](https://boards.straightdope.com/u/MrFloppy)\ **Post date:** [December 28, 2007, 4:29pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/3 "2007-12-28T16:29:30Z")
The B stock is more affordable but only has 1/200th of the voting rights compared to the A shares. It is supposed to track to 1/30th of the A shares cost. A can convert to B but not the other way around. ---
**Author:** ![OldGuy](https://avatars.discourse-cdn.com/v4/letter/o/3bc359/32.png) [@OldGuy](https://boards.straightdope.com/u/OldGuy)\ **Post date:** [December 29, 2007, 5:17am UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/4 "2007-12-29T05:17:20Z")
It’s a bit more than just “working” to keep the B shares at 1/30 of the value of the A shares. B shares are entitled to exactly 1/30 of any payments A shares get so 1/30 of the value would be where you’d expect the price to be (ignoring the value of the vote). Furthermore since an A share can be converted into 30 B shares, if the demand for B shares drives their value to more than 1/30 of an A share, an arbitrage would be created. Buy an A share covert it to 30 B’s and sell. So the price can never get too far above 1/30 of an A. It can go a bit above, since there would be costs to do this and since you’d have to be sure you could sell all 30 B’s. On the other hand there is no arbitrage pressure to keep the B’s all the way up to 1/30 of an A. ---
**Author:** ![Tastes\_of\_Chocolate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tastes_of_chocolate/32/3232_2.png) [@Tastes\_of\_Chocolate](https://boards.straightdope.com/u/Tastes_of_Chocolate)\ **Post date:** [December 29, 2007, 3:14pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/5 "2007-12-29T15:14:37Z")
Thanks folks. Now to go scrape up $4600 in sofa change, and buy a share. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [December 29, 2007, 4:47pm UTC](https://boards.straightdope.com/t/berkshire-hathaway-brk-a-vs-brk-b-a-stock-question/431479/6 "2007-12-29T16:47:20Z")
[QUOTE=Tastes of Chocolate] Thanks folks. Now to go scrape up $4600 in sofa change, and buy a share. [/QUOTE] Well, you did me a favor. I’ve been meaning to look into this, as I’m thinking of buying some shares in '08. Saved me some research. Thanks!