I happen to have saved the .pdf file of Berkshire's Class B offering. The file is dated 24 Apr 96 on my disk -- I guess that shows you how often I clean house... ;-)
On page 1, the following words are written:
The initial public offering price per share of Class B Common Stock is expected to be approximately one-thirtieth
(1/30th) of the closing sale price per share of Berkshire's common stock, $5.00 par value per share
(referred to herein as the 'Class A Common Stock'), on the New York Stock Exchange on the date of
pricing. The closing sale price for the Class A Common Stock was $33,000 per share on the New York
Stock Exchange on April 18, 1996, the last trading day before the date of this Prospectus.
Warren Buffett, as Berkshire's Chairman, and Charles Munger, as Berkshire's Vice Chairman, want
you to know the following (and urge you to ignore anyone telling you that these statements are
'boilerplate' or unimportant):
1. Mr. Buffett and Mr. Munger believe that Berkshire's Class A Common Stock is not undervalued at the
market price stated above. Neither Mr. Buffett nor Mr. Munger would currently buy Berkshire shares at
that price, nor would they recommend that their families or friends do so.
So if the stock was not a bargain at that price then (about $1100?), why is it a bargain at $1400-$1500 now? Obviously a lot has happened in the meantime (!), but if I (wildy, and without foundation) assume that a B share had an instrinsic value of $750 back then and intrinsic value has grown at 20% compounded, then intrinsic value would be ca. $1500 today, making the B shares no better than "fairly" priced. (Please, let me make it clear that I just pulled these figures out of the air!)
- Daniel
P.S. Wayne, I persevered with the Yahoo! BRK.A boards, and have found it to be worth the time -- but my gosh the voume is ridiculous!! |
