How Warren Buffett Is Temporarily $55.6B Richer Owing To Berkshire Class A Shares' Strange 51% Surge

How Warren Buffett Is Temporarily $55.6B Richer Owing To Berkshire Class A Shares' Strange 51% Surge

Berkshire Hathaway Inc. Class A (NYSE: BRK-A) shares soared over 51% in the after-hours session on Tuesday, ballooning the wealth of its CEO Warren Buffett.

What Happened: The increase in the share price in the after-hours seems to have taken place on a very low volume of just three shares. The 3 orders for the purchase of a share each were placed in the session for $661,504 each, as per Nasdaq.com.

It is worth noting that the trading volume in the after-hours is significantly low compared to the day's volume of 1,902 shares for BRK-A.

A discussion on the Ycombinator website speculated on the reasoning behind the after-hours trades. 

“Would it be just one rogue order filled? Not sure how after-hours tracking works, but I assume that it won't have a very deep order book, so it would be relatively easy to manipulate it. Given that BRK.A has the highest share price among any stocks, that order book would be even smaller,” wrote one poster — noway421.

“It could have been a deliberate limit order to avoid a margin call by raising the mark-to-market value of an account,” as per the user skzv.

The Class A shares of Berkshire Hathaway rose 51.07% in the after-hours session to $661,504 on Tuesday after closing 0.34% higher at $437,890.
See Also: Is Berkshire Hathaway (BRK.A) Stock A Good Buy?

Why It Matters: As per a U.S. Securities and Exchange Commission filing, Buffett, once the richest man in the world, owns 248,734 Class A shares of Berkshire Hathaway.

While at closing, those shares were worth $108.92 billion approximately, the price rise in after-hours means those same shares are now worth $164.54 billion. An increase of $55.6 billion.

Notably, no such price movement was noticed in Berkshire Hathaway’s Class B shares, which closed 0.2% higher at $290.85 in the regular session and gained almost 0.3% in the after-hours trading.

While the average volume of BRK.A is 11 shares, the same for BRK.B is 4.01 million shares.

Read Next: Why Jim Cramer Wants You To Go Long On Berkshire Stock

Photo: Courtesy of Fortune Live Media via Flickr

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