No. of Recommendations: 13
I do not believe that there has been a prior quarter with buy-backs and with ZERO B-share repurchases. Repurchase price might be a less useful indicator than previously thought.
A "zero B" month isn't that unusual. e.g., 5 months in a row of positive A purchases but zero B purchases from July to November 2022. Looking at only the months that both A and B shares were purchased, there seems to have been a slight uptrend in the ratio: hints of a slightly rising preference for A shares.
It also makes me wonder if 100% of the Q1 buybacks were related to donated appreciated shares.
Numerically unlikely, though I guess the $1.5bn we know about is a pretty substantial fraction of the $2.57bn of buybacks in the quarter. As we are told these actions took place the same day (and assuming it was in Q1?), then it had to have been in February, so it would have been 82% of the A shares purchased that month.
However, it's a good point. An individual selling to the company will be the one choosing the date rather than the boss, and it will be a date chosen to be maximum price for the seller rather than minimum for the buyer. From Berkshire's point of view, it need only be a price that isn't unreasonable, so I would read that as a price that is merely not above a fair value estimate--but may or may not include any particular discount for an additional margin of safety.
e.g., for an open market purchase, assume that management's conservative estimate of share value is $X.
They might buy only at $X minus 10% or 15% or some such number for open market purchases, but might still be perfectly happy to say yes at $X for a shareholder selling to the company. Maybe even a bit more: I think some years back there was a pretty firmly implied promise to be a buyer from existing shareholders, with no particular constraint on valuation levels at the time.
Jim
