Historically, Berkshire Hathaway shares have been split into Class A, which closed at $97,500 each on Friday, and Class B--known as "Baby Bs"--which closed at $3,247. These lofty prices discouraged small retail investors and the high-frequency traders who can buy and sell millions of shares in a millisecond. A 50-to-1 split of the B shares would drop their price to around $65, enabling an influx of new investors and making the company eligible for inclusion in the S&P 500 index (Berkshire Hathaway is the largest corporation excluded from the index).
Since Buffett has previously expressed concern that a share split would discourage long-term investing, the Burlington deal must have been attractive enough to change his mind. Opening up Berkshire to a new cadre of investors may puncture the legendary aura surrounding Buffett's company, but it also exemplifies the pragmatism responsible for creating the aura in the first place.
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