Warren Buffett Set a Personal Goal to Give Away His Entire $140 Billion Berkshire Stake by 2034. Here's What That Means for Future Share Supply.
Warren Buffett started giving away his Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) shares 20 years ago, but the legendary investor is speeding up the process. Last month, Buffett announced his plansโฆ
Warren Buffett started giving away his Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) shares 20 years ago, but the legendary investor is speeding up the process. Last month, Buffett announced his plans to dispose of his remaining shares between now and Dec. 31, 2034.
On the same day as the press release, Buffett converted $6 billion in Berkshire Class A shares into Class B shares and donated them to several private foundations.
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Interestingly enough, for the first time in 20 years, Buffett gave nothing to the Gates Foundation, opting instead to give only to various affiliated foundations, including The Susan Thompson Buffett Foundation, as well as the private foundations run by each of his three children.
While there's rampant speculation about why Buffett skipped out on the Gates Foundation this time, there is one more pertinent question on the minds of Berkshire Hathaway stock investors: How will this accelerating transfer of Buffett's stake impact the company and its shares moving forward?
Currently, the Oracle of Omaha holds a 13.2% economic interest in Berkshire Hathaway. This position is worth around $140 billion, implying that Buffett will give away an average of $17.5 billion each year for the next eight years.
However, it's as if these shared, once transferred, will immediately hit the market. The Internal Revenue Service (IRS) may require private foundations to donate 5% of their overall assets annually.
While Securities and Exchange Commission (SEC) filings from The Gates Foundation suggest that it has sold off the bulk of the $47 billion in Berkshire shares it has received over the past 20 years , Buffett's family foundations may opt to hold on to their gifted positions.
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