Berkshire Class A vs Class B Arbitrage & Conversion Ratios

Berkshire Hathaway’s dual-class capital structure presents a unique case study in institutional corporate finance and relative value equity trading. Analytical models within the Berkshire Hathaway 13F portfolio tracker track the structural price divergence between Class A (BRK.A) and Class B (BRK.B) common shares.

Under corporate charter rules established in the 2010 Burlington Northern split, each Class A share holds exactly 1,500 times the economic interest of a Class B share, though Class A retains 10,000 times the voting rights. Crucially, Class A shares can be converted into 1,500 Class B shares at any time, but Class B shares can never be converted into Class A.

This asymmetric one-way conversion rule sets an absolute ceiling on Class B pricing: BRK.B can never trade at a persistent premium over 1/1,500th of BRK.A. Whenever market dislocations cause Class B to trade at temporary discounts due to retail flow imbalances, relative value desks execute risk-free conversion arbitrage.