Why One Share of Warren Buffett's Company Costs More Than Most People Cars

What a Stock Split Does

A stock split just divides each share into multiple smaller ones. The total value of what you own doesn't change, only the number of pieces it's cut into. A company trading at 10,000 rupees a share doing a 10 for 1 split leaves you holding ten shares worth 1,000 rupees each, same total value as before.

Companies usually do this for one simple reason. A lower price feels more approachable. More people can afford to buy in, trading volume tends to pick up, and the stock feels less intimidating to a first time investor.

Why Buffett Skipped This Entirely

Buffett's reasoning comes down to who he wanted holding Berkshire stock in the first place. He's written about this plenty over the years, and the short version is that he didn't want the share price low enough to attract short term traders chasing quick swings. Keep the price extremely high, and you naturally filter out the casual buyer looking for a fast flip.

His point was that splitting the stock doesn't change the business underneath it one bit. It just changes who shows up to buy it. Buffett wanted long term owners, people making a real decision to hold the company for years, not traders drawn in purely because the entry price looked cheap.

Then Came the Class B Shares

By the mid 1990s, even Buffett had to admit the price had gotten out of hand for most individual investors. So Berkshire introduced Class B shares, priced at a small fraction of Class A, giving smaller investors an actual way in.

Part of what pushed this decision was that financial firms had started building investment products that pooled smaller investors' money together just to buy Berkshire shares indirectly, charging fees along the way for the privilege. Buffett didn't love that setup. Official Class B shares cut out that middleman and let people buy in directly instead of paying someone else to do it for them.

Class B shares carry fewer voting rights than Class A shares. For most individual investors who have no interest in influencing how the company is run, that trade off barely matters next to simply being able to own a piece of it.

What This Says About How People Actually Think About Stock Prices

Here's the part worth remembering next time you're looking at any stock, not just Berkshire. A low share price tells you nothing on its own about whether a stock is a good deal. Price per share is just the company's total value divided by however many shares happen to exist. A stock at 50 rupees isn't automatically cheaper, in any meaningful sense, than one at 5,000 rupees.

Plenty of newer investors gravitate toward lower priced stocks anyway, sometimes without realizing the number by itself means almost nothing. Buffett keeping Berkshire's price sky high was, in a way, a direct challenge to that instinct. If you wanted in, you had to actually think about what you were buying instead of being drawn in by a comfortable looking sticker price.

The Lesson for Judging Any Stock

What actually tells you whether a stock is worth buying has nothing to do with the raw price tag. Things like the price to earnings ratio, revenue growth, and profitability relative to the company's size matter far more. A 100 rupee stock can be badly overpriced. A 50,000 rupee stock can be a bargain. The sticker price alone won't tell you which is which.

The Bigger Picture

Buffett's refusal to split Berkshire's original shares for decades turned into one of the more interesting quirks in public markets, and it came from a clear, deliberate philosophy rather than stubbornness for its own sake. It's a reminder that some of the most successful long term investors think about price, accessibility, and who's actually buying their stock very differently than the standard corporate playbook.

This article covers general information about Berkshire Hathaway's share structure and does not constitute investment advice or a recommendation regarding any specific stock.