Berkshire Hathaway (BRK.A / BRK.B) might be buying back more stock than investors realize.
The diversified holding company appears to be repurchasing its super voting Class A common stock directly from shareholders.
The repurchases from shareholders are supplementing the company’s open-market stock buybacks that reached a record $9.6 billion U.S. in this year’s third quarter.
Most of the Q3 stock buybacks on the open market consisted of Berkshire’s more affordable Class B stock.
Trading at $853,500 U.S. each, there is very little trading in the expensive Class A shares,
reflecting the buy-and-hold approach of many stockholders.
However, market data shows increased activity in Berkshire’s Class A stock in recent weeks.
That suggests the company might be supplementing its open market repurchases with private transactions conducted directly with longtime holders of the Class A shares.
In the past, Buffett has been quick to buy Berkshire’s Class A stock when it has been available.
In 2024, Ruth Gottesman, the widow of longtime Berkshire investor David Gottesman, donated $1 billion U.S. of Class A stock to a New York medical school.
Buffett quickly bought the $1 billion U.S. of stock from the school.
Berkshire Hathaway’s current CEO Greg Abel has said, “We may also purchase large blocks of shares directly from major holders when the opportunity presents itself.”
Buffett has long been a fan of retiring the company’s stock, particularly the Class A shares that have seven times the voting power of the B stock.
Currently Buffett has a 30% voting stake in Berkshire Hathaway because of the 188,000 Class A shares he owns that are worth $160 billion U.S.
Buffett, 96, likely wants to maintain voting control of Berkshire for himself and the foundation that will hold his stock after his death.
Additionally, Berkshire Hathaway’s Class A stock can be converted to B shares but not the other way around.
The more affordable BRK.B stock has gained 16% over the last 12 months to trade at $575.25 U.S. per share.
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