It has been speculated that this may occur, but few were expecting this news this soon. Warren Buffett has been notified by Standard & Poor’s Indexes that Berkshire Hathaway Inc. (NYSE: BRK-B) will replace Burlington Northern Santa Fe (NYSE: BNI) in the S&P 500.
The change is still on a date to be determined.
The total float will have to be calculated out, but this will not likely be the full float nor the full market capitalization of Berkshire Hathaway that will be included in the S&P 500 Index because of the Warren Buffett and Buffett Trust stakes.
Berkshire Hathaway will also join the S&P 100 on a date to be determined. The merger is expected to be completed in February. That is what the recent stock split did for investors. We still think Buffett should consider adopting a similar stock split for the A shares, although at a smaller ratio. The B-shares closed at $68.00 today and shares rose by over 7% to $73.05 on 777,347 after-hours shares as of 5:49 PM EST.
You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.
JON C. OGG