I was looking at this stock: Berkshire Hathaway Inc. (BRK-B) (The Class B shares).

How come it has such a low P/E ratio?

  • If the E is zero or negative then it can be even harder to compute a P/E.
    – JB King
    Jan 3, 2013 at 22:07

1 Answer 1


See Berkshire Hathaway Inc. (BRK-A) (The Class A shares) and it will all be clear to you. IMHO, the quote for the B shares is mistaken, it used earning of A shares, but price of B. strange. Excellent question, welcome to SE.

Berkshire Hathaway is a stock that currently trades for nearly US$140,000. This makes it difficult for individual investors to buy or sell these shares. The CEO Warren Buffet chose to reinvest any profits which means no dividends, and never to split the shares, which meant no little liquidity. There was great pressure on him to find a way to make investing in Berkshire Hathaway more accessible. In June '96, the B shares were issued which represented 1/30 of a share of the Class A stock. As even these "Baby Berks" rose in price to pass US$4500 per share, the stock split 50 to 1, and now trade in the US$90's.

So, the current ratio is 1500 to 1. The class B shares have 1/10,000 the voting rights of the A. An A share may be swapped for 1500 B shares on request, but not vice-versa.

  • Found that comment and was midway through adjusting my answer. Ya beat me to it. Here's your upvote.
    – JohnFx
    Jan 2, 2013 at 23:34
  • what's the difference between the A and B shares in this case?
    Jan 3, 2013 at 16:51
  • Updated answer with the details. Interesting history. Jan 3, 2013 at 17:10

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