Author Topic: Berkshire Hathaway - Break it up? - Size is the anchor of performance  (Read 12218 times)

bizaro86

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Re: Berkshire Hathaway - Break it up? - Size is the anchor of performance
« Reply #40 on: January 13, 2021, 10:49:53 AM »
I don't think Munger's heirs (the "Munger Clan" lol) will have a meaningful voting stake in Berkshire.  I understand that much of Munger's shares were A shares and thus more potent but he never had enough shares to be a big voting influence, especially after many donations over the years (which continue and are likely at his death).

Fair enough. Are there any other large holders of the A? After WEB's shares all get converted to Bs and sold it seems like there could be a bit of a power vacuum. And I think the one-time gains from the split would be pretty attractive.


MarioP

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From the proxy :

Warren E. Buffett, whose address is 3555 Farnam Street, Omaha, NE 68131, is a nominee for director and the only person known to the Corporation to be the beneficial owner of more than 5% of the Corporationís Class A Stock.

TREVNI

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I don't think Munger's heirs (the "Munger Clan" lol) will have a meaningful voting stake in Berkshire.  I understand that much of Munger's shares were A shares and thus more potent but he never had enough shares to be a big voting influence, especially after many donations over the years (which continue and are likely at his death).

Fair enough. Are there any other large holders of the A? After WEB's shares all get converted to Bs and sold it seems like there could be a bit of a power vacuum. And I think the one-time gains from the split would be pretty attractive.

Another group worth remembering is what Lawrence Cunningham calls Quality Shareholders. There are a lot of large institutions with significant holdings that will probably be called on to weigh in on decisions in the future. Even if they approve of continuing as is, which is likely to be the case, there will be more calls for them to bless the actions of management once present management has passed the baton.

I suspect there won't be any real threat to breaking up Berkshire for the first 10-15 years, maybe longer.



gfp

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I think that between the share repurchases, some from the estates of long-time holders, and deals like the $1.2 Billion of A shares from the Ueltschi estate (flightSafety), and the one-way conversion to get liquidity and gift flexibility there will be very few A shares that remain over time.  When an A share is repurchased or converted to Bs it is gone forever.  Buffett has shown an interest in repurchasing A shares despite the illiquidity.  I think long term he envisions more of a single voting class.  By that point the company will be too big for voting rights to matter much to an activist.  If someone wants to influence Berkshire 10 years or more from now they are going to have to win hearts and minds, not accumulate a meaningful voting block themselves.

I don't think Munger's heirs (the "Munger Clan" lol) will have a meaningful voting stake in Berkshire.  I understand that much of Munger's shares were A shares and thus more potent but he never had enough shares to be a big voting influence, especially after many donations over the years (which continue and are likely at his death).

Fair enough. Are there any other large holders of the A? After WEB's shares all get converted to Bs and sold it seems like there could be a bit of a power vacuum. And I think the one-time gains from the split would be pretty attractive.