Friday, August 15, 2014
OMAHA, Neb. (AP) — Naysayers have been calling shares of Warren Buffett's company overpriced for decades.
But Berkshire Hathaway Class A stock, which first topped $1,000 in 1983, on Thursday surpassed $200,000.
"Everybody has now been proven wrong on it," said Andy Kilpatrick, who wrote "Of Permanent Value: The Story of Warren Buffett."
Berkshire has long had the most expensive U.S. stock. Buffett never split Berkshire's A shares, although he did create more affordable Class B shares in 1996 that now sell for just over $135 each.
The stock has had its ups and downs. The Class A shares first hit six figures in October 2006 and peaked at $151,650 in December 2007, when the Great Recession began. They fell as low as $70,050 in March 2009.
On Thursday, they reached an all-time high of $203,081 before closing at $202,850.
Berkshire Hathaway has come a long way since Buffett's investment partnership started buying shares for $7 and $8 apiece in 1962. At that point, Berkshire was a New England textile company.
After 1969, Berkshire became Buffett's investment vehicle and he used revenue from the textile firm to begin buying other companies such as National Indemnity insurance and See's Candy.
Today, many of its more than 80 subsidiaries, which include insurance, utility, railroad and other businesses, are performing well. Berkshire employs more than 330,000 people and also has major investments in companies including Coca-Cola Co., IBM and Wells Fargo & Co. And Berkshire has more than $55 billion cash on hand that could be used for acquisitions.
Earlier this month, the Omaha-based company reported second-quarter profit of $6.4 billion, or $3,889 per Class A share.
"It is indeed a remarkable run," Kilpatrick said.
Berkshire appears primed to continue growing, even if it will likely be at a slower rate than in the past because of the conglomerate's huge size.
Buffett, who is turning 84 later this month, has amassed a fortune worth more than $65 billion from his Berkshire shares.
Berkshire Hathaway Inc.: www.berkshirehathaway.com
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