DEFINITION of 'Baby Berkshire'
Baby Berkshire refers to the 50:1 stock split after the market close on January 20th, 2010 by Berkshire Hathaway Class B shares. This split made the value of each share much smaller as far as price was concerned. At the market close, Berkshire Class B shares were trading at $3,476. The stock split came as a result of Berkshire's acquisition of Burlington Northern Santa Fe.
BREAKING DOWN 'Baby Berkshire'
Prior to the stock split, Berkshire Class B shares did not have enough trading volume to make them eligible for inclusion in the S&P 500 market index. However, lowering the market price through the stock split put the stock into a more conventional trading range, where it became much more frequently traded. Berkshire Class B shares were added to the S&P 500 on February 12th, 2010, taking the spot previously held by Burlington Northern Santa Fe.
The nickname of Baby Berkshire follows the tradition of Baby Bells and Baby Bills.