Options Selling News: Buffet Splitting His Class B Shares

Related options selling news:

Warren Buffett’s Berkshire Hathaway has set the date for a shareholders meeting related to its planned acquisition of Burlington Northern Santa Fe.

In a preliminary proxy statement filed this morning with the SEC, Berkshire gives notice that a special meeting of shareholders will be held at 9:30a on Wednesday, January 20, 2010, at Omaha’s Holland Performing Arts Center.     

Shareholders are being asked to approve a 50-for-1 split of Berkshire’s Class B shares, without splitting the higher-priced Class A shares.

That split would bring Class B shares down from about $3300 each (at today’s price) to roughly $66 each.

In an interview with CNBCjust after the Burlington deal was announced about a month ago, Buffett told us:

“I’m not big on stock splits. But by having this split, it enables anybody that has as little as one share of BNSF to opt for the tax-free exchange… So those small shareholders can have exactly the same availability that otherwise would only have been available to a big shareholder.”

What’s in it for Options Selling?

So what? Well in my opinion this is good news for option sellers. Why? Because Berkshire is a good stable stock. Not volatile and now well priced to sell options on. I am going to be keeping an eye on this one. Who knows? It might become on of my favorite stocks to do income strategies on. Time will tell.

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3 Comments

  1. SYED on January 5, 2010 at 1:14 pm

    Good idea but you are not going to collect much premium by selling puts on Berkshire.
    What will be your comments.
    waiting for your reply!

    • Genius on January 7, 2010 at 5:26 pm

      We will have to see when they come out how much premium they have. I am assuming the stock will not move much in price and be something like a Coke (KO) or Wal-Mart (WMT)

  2. Syed Ahmed on January 7, 2010 at 10:51 pm

    You are very right. Good to own as long as Mr. Buffet is alive and good. I wish him long life. But if he is not there then stock might go south and can be good for option sellers. Again I wish him long and good life. What you think?

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