When Warren Buffett decided to leave the bulk of his fortune to charity, he opted to leverage the existing infrastructure of the Bill and Melinda Gates Foundation rather than setting up his own foundation. Taking such a step was quite a shock given the fact that many billionaires wish to create their own foundations that will carry on their name and legacy for generations to come. However, many Berkshire shareholders have wondered whether Gates Foundation selling would depress Berkshire’s share price. We take a look at this question in the article.
Last month, I wrote about potential opportunities to profit from arbitrage from pricing discrepancies between Berkshire Hathaway Class A and Class B shares. While the arbitrage opportunity was reduced significantly by February 26, it has re-emerged again more recently. Forced selling by charitable foundations may be the cause. Read this post to learn more about this potential arbitrage opportunity.