Berkshire Hathaway Inc’s stock price topped the $200,000 mark on Thursday for the first time, the latest accomplishment for the firm that Warren Buffet developed for almost 50 years into what some analysts describe as a US economy’s microcosm.
Class A shares of the company, which have never been broken down, hit as high as $201,114, as its market value soared to $327.8 billion, making it the fourth-largest in the blue-chip S&P 500 gauge, according to Reuters.
Share price of the Omaha, Nebraska-based firm has soared 100% since it first topped the $100,000 mark on Oct. 5, 2006. The S&P has climbed 44% since the same date through yesterday.
Buffet, who’s approaching 84 and is the third richest person in the world, oversees a corporation under whose umbrella more than 80 ventures are operated, including Geico car insurance firm, the BNSF railway, Dairy Queen ice cream, and equities of firms such as Wells Fargo & Co and Coca-Cola Co. worth more than $119 billion.
Berkshire Hathaway reported a record $6.4 billion profit for the second-quarter, buoyed by a stock swap and surging earnings in many ventures, and revenue of $49.76 billion.
By some accounts, the Berkshire stock remains modestly valued, exchanging at nearly 1.4 times its book value, a valuation of assets minus liabilities, in the latest quarter.
“As I’ve long told you, Berkshire’s intrinsic value far exceeds its book value. Moreover, the difference has widened considerably in recent years,†Buffet is quoted by the Chicago Tribune as saying. He insists that a firm’s intrinsic value is a more accurate metric for its valuation.
Buffet has said he will look at buybacks only at or lower than a 1.2 multiple.
The business mogul has been giving to charities since 2006, but still holds one fifth stake of the firm and controls nearly one-third of its voting rights.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
