On July 1, Berkshire Hathaway (BRK-B) announced that its chairman, Warren Buffett, will convert his 11,250 Berkshire Class A shares into 16,875,000 Class B shares. Berkshire Hathaway said, “Of these Class B shares, 16,811,941 will be donated to five foundations: Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation and NoVo Foundation. These shares have a current value of about $3.6 billion.”
According to the company’s release, since 2006, Buffett has donated $34 billion towards these five foundations. The value is based on the prevailing market value at the time of the gift. Along with donating shares towards philanthropic causes, Buffett also auctions an annual lunch. The proceeds go towards the Glide Foundation—a charity based in San Francisco. Reuters said that Buffett “has raised about $34.2 million for Glide in 20 annual auctions, which began in 2000 and moved to eBay in 2003.”
In 2019, Justin Sun, the co-founder of the cryptocurrency project Tron, won the auction for lunch with Buffett. Sun paid a record $4.6 million for the lunch. Sun paying a hefty sum for the event surprised many people. Buffett is known to have bearish views on cryptocurrencies.
Berkshire versus S&P 500
Berkshire Hathaway holds several publicly traded stocks in its portfolio. Apple (AAPL) is Berkshire Hathaway’s largest holding. Berkshire Hathaway first took a stake in Apple in 2016. Since then, the company has gradually increased its stake. Apple is Berkshire Hathaway’s largest holding based on its first-quarter 13F. Berkshire Hathaway also added Amazon (AMZN) to its portfolio in the second quarter. However, Amazon shares were added by a different investment manager and not Buffett. Berkshire Hathaway has underperformed the S&P 500 (SPY) by a wide margin in 2019. Although the S&P 500 had the best first half in years, Berkshire Hathaway only rose 4.4%. Read Which Grove Is Driving Warren Buffett’s Underperformance to learn more. Buffett is known for expressing his opinion on an array of topics. He seemed to target President Trump in his annual letter in 2019.
Coming back to Buffett’s philanthropical pursuits, Berkshire Hathaway said in the release that “Buffett intends to have all of his Berkshire shares given to philanthropy through annual gifts that will be completed ten years after his estate is settled.”