Berkshire Hathaway stock soars on buyback policy change

OMAHA, Neb. – Berkshire Hathaway’s stock price jumped more than 5 percent on Wednesday after it eased restrictions on buying back its own shares.

The Omaha, Nebraska, conglomerate led by Warren Buffett said Tuesday that after it posts earnings on Aug. 3, it will begin allowing Buffett to buy stock at prices up to the shares’ intrinsic value.

Since 2012, Berkshire (BRK.A) has restricted buybacks to prices below 120 percent of the stock’s book value, which is an estimate of the company’s value after liabilities are subtracted from assets.

Given the company’s massive cash pile (Berkshire has hoarded more than $100 billion while Buffett looks for another acquisition or investment), the rule change ups the odds that it will be directed at share buybacks.

It will not do so if it reduces its cash below $20 billion.

Berkshire’s class A shares soared $14,710 in Wednesday trading, closing at $303,210.

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