The origins of Buffett's Berkshire
Excerpt from Berkshire Hathaway's 2014 letter to shareholders retells the experiences and mistakes of the legendary investor
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ON May 6, 1964, Berkshire Hathaway, then run by a man named Seabury Stanton, sent a letter to its shareholders offering to buy 225,000 shares of its stock for US$11.375 per share.
I had expected the letter; I was surprised by the price.
Berkshire then had 1,583,680 shares outstanding. About 7 per cent of these were owned by Buffett Partnership Ltd ("BPL"), an investing entity that I managed and in which I had virtually all of my net worth. Shortly before the tender offer was mailed, Stanton had asked me at what price BPL would sell its holdings. I answered $11.50, and he said, "Fine, we have a deal."
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