The Wall Street Journal-20080130-Berkshire Shareholder Loses Bid for Stock Split
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Associated Press
Berkshire Hathaway Inc. shareholders likely won't get to vote this year on whether to split the company's Class A stock, which sells for almost $140,000.
The Securities and Exchange Commission has given Warren Buffett's company permission not to include in its annual-meeting materials a proposal on a stock split because the proposal calls for adjusting the value of Class A shares to a specific value. That is according to letters an SEC lawyer exchanged with Berkshire officials.
Even if such a proposal were to go to shareholders, it would likely face opposition from Mr. Buffett, who has never split Berkshire's stock since he took control of the textile firm in the 1960s. Mr. Buffett holds about 31% of Berkshire's stock. The annual meeting will be held in May.
The shareholder who proposed the stock split, Robert Zelin Sr., said yesterday that he didn't want to discuss the proposal, which he considers "dead for this year."
In his letter, Mr. Zelin suggested that Berkshire split its Class A shares to make their value fall between $10,000 and $30,000, so the shares would be more affordable and liquid. "We believe that the splitting of the Class A shares will increase shareholder liquidity and value for present shareholders," Mr. Zelin wrote.
A spokeswoman for Mr. Buffett said no one was available to comment. The investment guru has previously said he hopes Berkshire's shareholders think of themselves as partners in the company who are interested in its long-term prospects, not the movement of its share price.
The closest Berkshire has come to a stock split is when Mr. Buffett decided in 1996 to issue Class B shares and establish a procedure allowing owners of a Class A share to convert one Class A share to 30 Class B shares.
The Class B stock was designed for people who wanted to invest in the "Oracle of Omaha's" company but couldn't afford a Class A share, which then sold for about $33,000. Mr. Buffett also wanted to curtail the activities of investment trusts that were selling fractional units of Berkshire stock.
Yesterday, Berkshire's Class A shares gained $1,300 to $139,700 in 4 p.m. composite trading on the New York Stock Exchange. Class B shares gained $125 to $4,645.
Berkshire owns furniture, insurance, jewelry and candy companies, restaurants, natural-gas and corporate-jet companies and has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
