Maybe Warren Buffett Prefers Nickel & Dime Railroad Additions Over a Whale of a Deal (BNI, BRK-A)

Shares of Burlington Northern Santa Fe Corp. (NYSE:BNI) are indicated higher Tuesday after Warrner Buffett’s Berkshire Hathaway (NYSE:BRK-A) upped its stake in the railroad company.  In a filing from Monday evening, it was seen that Berkshire Hathaway has purchased roughly 10.1 million shares of common stock last week on three different days.  This latest rail share purchase bring Buffett’s stake up to as much as 14.8% on a fully diluted basis.

Shares of Burlington Northern closed at $80.33 on Monday, and shares are indicated at $81.00 to $82.00 in early pre-market indications on Tuesday.  This is actually still in the middle of the $64.75 to $95.47 trading range seen over the last 52-weeks.   

With just over 52 million shares now held, this latest transaction at an implied $81.00 stock value would have an implied market value of over $4.2 Billion.  We still have yet to see a ‘whale of a deal’ from Buffett, and the total market cap of this one is north of $28 Billion.  Warren & Co. had nearly $50 Billion in purely cash and liquidity in its arsenal as of June 30, and that is before looking at its other assets that could be converted to cash or equivalents in a few days if it sold off some of its publicly traded stocks.

Jon C. Ogg
August 28, 2007