The Bill & Melinda Gates Foundation is being extremely patient in its sales of Berkshire Hathaway B shares in what's likely an effort to avoid driving down the stock price.
The Gates Foundation is the major beneficiary of Warren Buffett's 2006 decision to give away the majority of his Berkshire-derived wealth to charity. Buffett has given the Gates Foundation hundreds of thousands of BRKB shares in each of the past four years.
On July 1, the most recent date of Buffett's annual gift, an SEC filing shows the Gates Foundation as having 1,679,838 BRKB shares. As of its most recent filing Friday, the foundation had 1,619,880 shares.
The Gates Foundation netted in the ballpark of $200 million for the sale of those 60,000 shares. The foundation still owns about 10.8 percent of the outstanding BRKB shares, making it the largest owner (Buffett is still easily the largest owner of Berkshire A shares, which he's slowly converting into B shares as part of the annual gifts).
The Gates Foundation has been selling BRKB stock daily since July 1, SEC filings show. The Gates Foundation says in the filings that the sales are to "facilitate compliance with federal excise tax rules limiting excess business holdings by private foundations." The sales are also likely being done to raise cash for the annual charitable investments that Buffett is now mandating.
A shareholder as large as the Gates Foundation runs the risk of depressing stock prices if sales volumes are too high. But the number of shares that the Gates Foundation is selling per day is just a fraction of Berkshire's trading volume.
Berkshire B shares have an average trading volume of about 32,000 shares, according to Morningstar. This past Tuesday through Thursday, the Gates Foundation sold an average of 1,183 BRKB shares per day. That's just 3.7 percent of the average daily volume.
Berkshire shareholders should be pleased that the Gates Foundation is selling the shares so patiently. You'd expect nothing less from a foundation named for one of Buffett's best friends.
Disclosure: Long BRKB
The Gates Foundation is the major beneficiary of Warren Buffett's 2006 decision to give away the majority of his Berkshire-derived wealth to charity. Buffett has given the Gates Foundation hundreds of thousands of BRKB shares in each of the past four years.
On July 1, the most recent date of Buffett's annual gift, an SEC filing shows the Gates Foundation as having 1,679,838 BRKB shares. As of its most recent filing Friday, the foundation had 1,619,880 shares.
The Gates Foundation netted in the ballpark of $200 million for the sale of those 60,000 shares. The foundation still owns about 10.8 percent of the outstanding BRKB shares, making it the largest owner (Buffett is still easily the largest owner of Berkshire A shares, which he's slowly converting into B shares as part of the annual gifts).
The Gates Foundation has been selling BRKB stock daily since July 1, SEC filings show. The Gates Foundation says in the filings that the sales are to "facilitate compliance with federal excise tax rules limiting excess business holdings by private foundations." The sales are also likely being done to raise cash for the annual charitable investments that Buffett is now mandating.
A shareholder as large as the Gates Foundation runs the risk of depressing stock prices if sales volumes are too high. But the number of shares that the Gates Foundation is selling per day is just a fraction of Berkshire's trading volume.
Berkshire B shares have an average trading volume of about 32,000 shares, according to Morningstar. This past Tuesday through Thursday, the Gates Foundation sold an average of 1,183 BRKB shares per day. That's just 3.7 percent of the average daily volume.
Berkshire shareholders should be pleased that the Gates Foundation is selling the shares so patiently. You'd expect nothing less from a foundation named for one of Buffett's best friends.
Disclosure: Long BRKB
