No. of Recommendations: 14
To be clear, I'm not debating anything. I'm simply acknowledging my ignorance by expressing curiosity as to how a fixed 1500 to 1 ratio accommodates differing A and B share buyback values. In my simplistic understanding a dollar is worth 4 quarters only so long as both are equivalent in value. No offense intended.
Very politely asked!
The 1500:1 exactly economic ratio means things like:
1) If a $1 dividend was declared on B shares, Berkshire would necessarily have to declare a $1500 dividend on A shares
2) If berkshire were to spin out Dairy Queen by issuing shares in Dairy Queen to currently shareholders in Brk, and it spun out 1 DQ share per B share owned, it would necessiarly have to offer 1500 DQ shares per A share owned.
3) If Berkshire was liquidated, and the proceeds were distributed to shareholders, if the proceeds were $400 for each B share held, the proceeds would necessarily be $600000 for each A share held.
Further
4) any A share holder always has the right to hand in their A share to BRK and receive in return 1500 B shares. The reverse is not the case, you cannot "buy" an A share from Berkshire using 1500 B shares.
Given all these official constraints, the people who own A and B shares are still free to sell them or buy them at whatever prices they can negotiate with their counterparties. And apparently that ratio is typically a bit above 1500.
R:)
