- Berkshire Hathaway’s Class A stock is trading just below the maximum price allowed on the Nasdaq.
- The stock traded at $429,172 on Thursday, below the limit of $429,496.7295.
- Nasdaq is rushing to issue an upgrade this month to fix the problem.
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Class A shares of Berkshire Hathaway are fast approaching the maximum stock price allowed on the Nasdaq exchange, The Wall Street Journal first reported on Tuesday.
The stock sat at $429,172 on Thursday morning, a few hundred dollars below the maximum of $429,496.7295.
On Tuesday, Nasdaq temporarily suspended broadcasting the price of Class A shares over several popular data feeds that provide real-time price updates for online brokerages and finance websites.
The issue stems from the way Nasdaq’s computers count and the compact digital format it uses.
“Nasdaq and some other market operators record stock prices in a compact computer format that uses 32 bits, or ones and zeros,” The Journal explained. “The biggest number possible is two to the 32nd power minus one, or 4,294,967,295. Stock prices are frequently stored using four decimal places, so the highest possible price is $429,496.7295.”
Nasdaq is rushing to issue an upgrade to fix the problem, expected by May 17, the report said.
Berkshire Hathaway is the only stock close to hitting this upside limit, in part because of CEO and Chairman Warren Buffett’s refusal to split the stock; rather than do that, Berkshire Hathaway in 1996 issued Class B shares, which are more accessible to investors, given their price on Thursday of $285.
“I know that if we had something that it was a lot easier for anybody with $500 to buy, that we would get an awful lot of people buying it who didn’t have the faintest idea what they were doing,” Buffett told investors at Berkshire’s annual meeting in 1995.
Outgoing Amazon CEO Jeff Bezos is said to have resisted splitting Amazon stock to attract long-term investors rather than speculative investors who like to focus on lower-priced stocks.
Shares of Berkshire Hathaway are up more than 20% year-to-date, as a reflation trade out of growth and into cyclicals unfolds in anticipation of a reopened economy.
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