Warren Buffett Disposes of $2.8 Billion in Berkshire Hathaway Stock

Industrials

Published: July 15, 2014 3:18 pm

Warren Buffett has never really been a big seller of Berkshire Hathaway Inc. (NYSE: BRK-A) stock. Still, it has been well telegraphed that the shares in Mr. Buffett’s estate would go into a trust and ultimately would end up in the Bill & Melinda Gates Foundation. Now we have an SEC filing showing that Buffett has disposed of shares.

It looks as though Buffett converted A shares into B shares with an associated charitable gift seen on a Form 4 filing with the Securities and Exchange Commission. Also, we would point out that the shares were actually the lower-priced B shares of Berkshire Hathaway Inc. (NYSE: BRK-B). The SEC filing appears to cover over 21.7 million Class B Berkshire Hathaway shares.

The value as of Monday — close to $2.8 billion.

Footnotes from the SEC filing said,

“Except for the gift of 130 shares on July 1, 2014 and the conversion of 15,000 shares of Class A Common Stock into 22,500,000 shares of Class B Common Stock on July 2, 2014, each of these reported transactions was a gift from Warren E. Buffett to a charity or charitable foundation… Each share of Class A Common Stock is convertible at any time at the option of the holder into 1,500 shares of Class B Common Stock…”

A subsequent 13D filing from Berkshire Hathaway showed that Buffett owns and has the sole power to vote and to dispose of 321,000 shares of Class A Common Stock and 2,105,640 shares of Class B Common Stock. This represents approximately 38.37% of the outstanding shares of Class A common stock, 0.17% of the outstanding shares of Class B common stock, 33.55% of the aggregate voting power of the outstanding shares of both classes (A and B shares), and 19.63% of the economic interest of the outstanding shares of both classes.

The 13D filing confirmed Buffett’s process and which entities the share sale proceeds were going to:

On June 12, 2014, Mr. Buffett donated 6,760 shares of Class B Common Stock to a charitable organization.
On June 12, 2014, Mr. Buffett donated 9,755 shares of Class B Common Stock to a charitable organization.
On June 30, 2014, Mr. Buffett donated 79 shares of Class B Common Stock to a charitable organization.
On June 30, 2014, Mr. Buffett donated 79 shares of Class B Common Stock to a charitable organization.
On July 1, 2014, Mr. Buffett gave 10 shares of Class B Common Stock to each of 13 elementary school children in connection with an educational competition.
On July 2, 2014, Mr. Buffett converted 15,000 shares of Class A Common Stock into 22,500,000 shares of Class B Common Stock.
On July 14, 2014, Mr. Buffett donated 16,585,510 shares of Class B Common Stock to the Bill and Melinda Gates Foundation pursuant to his previously announced irrevocable pledge to this foundation.
On July 14, 2014, Mr. Buffett donated 1,658,551 shares of Class B Common Stock to the Susan Thompson Buffett Foundation pursuant to his previously announced irrevocable pledge to this foundation.
On July 14, 2014, Mr. Buffett donated 1,160,981 shares of Class B Common Stock to each of the Sherwood Foundation, the Howard G. Buffett Foundation and the NoVo Foundation pursuant to his previously announced irrevocable pledges to these foundations.

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Should this move signal the start of a mass exodus in Buffett’s stock holdings in Berkshire Hathaway? Most likely, not at all. A stock sale or disposal of $2.8 billion for the rest of us may be empire building money. For Warren Buffet it is just a drop in the bucket.

The image below (click to expand) is of the shares disposed of included in the Form 4.

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