What Is the Most Expensive Stock in the World?
Explore the reasons behind the world's highest stock price per share and understand its true implications for company value and investing.
The term “most expensive stock” typically refers to the company with the highest price per individual share, rather than the total market value of the company. A high share price alone does not always indicate a superior investment or a company with the largest overall valuation. The factors contributing to an exceptionally high share price are often unique to the company and its historical corporate decisions.
Identifying the Most Expensive Stock
The stock widely recognized as having the highest per-share price in the world is Berkshire Hathaway Class A shares, trading under the ticker symbol BRK.A. Its price currently stood at approximately $734,405.00 per share.
Berkshire Hathaway is a diversified holding company with a vast portfolio of businesses and investments across various sectors. Its operations span insurance, freight rail transportation, energy generation and distribution, manufacturing, and retail, among others. This conglomerate structure has contributed to its substantial growth and value accumulation over many decades.
Reasons for a High Share Price
The exceptionally high per-share price of Berkshire Hathaway Class A stock primarily stems from a deliberate corporate policy of never splitting its shares. Unlike many companies that split shares to increase liquidity, Berkshire Hathaway has consistently avoided this practice for its Class A shares. This long-standing decision has allowed the share price to compound significantly over decades as the company’s intrinsic value grew.
This policy reflects a specific investment philosophy aimed at attracting and retaining long-term investors. The high price point acts as a natural filter, discouraging short-term speculation and day trading, which aligns with the company’s focus on fundamental value and patient capital appreciation.
While the company’s growth and successful strategies contribute to its value, the direct cause of the high share price is the absence of stock splits. The company did introduce Class B shares (BRK.B) in 1996 to provide a more accessible entry point for individual investors, and these Class B shares underwent a 50-for-1 split in 2010 to further reduce their price. This dual-class structure allows the Class A shares to maintain their high price, preserving the intended investor base, while offering a more affordable alternative through Class B shares.
Understanding What a High Stock Price Implies
A high per-share stock price does not inherently mean a company is more valuable or a better investment than one with a lower share price. The true measure of a company’s total worth is its market capitalization, which is calculated by multiplying the current share price by the total number of outstanding shares. For instance, a company with a $100 share price and 10 million shares outstanding has a market capitalization of $1 billion, the same as a company with a $10 share price and 100 million shares outstanding.
A high individual share price can impact accessibility for individual investors, as purchasing even a single share requires substantial capital. For example, a Class A share of Berkshire Hathaway, at over $700,000, is beyond the reach of many retail investors. However, the advent of fractional share trading through various brokerage platforms has made it possible for investors to purchase portions of high-priced shares, thereby lowering the entry barrier. Additionally, Berkshire Hathaway offers Class B shares, which trade at a significantly lower price point, currently around $490 per share, making them more attainable for a broader range of investors.
Investment decisions should be based on a thorough analysis of a company’s financial health, business model, growth prospects, and overall value, rather than solely on the numerical price of its shares. Factors such as earnings per share, price-to-earnings ratios, and future outlook provide a more comprehensive picture for evaluating an investment. A high share price might reflect a company’s success and stable growth, but it does not automatically imply that it is undervalued or represents a superior opportunity compared to other companies with lower share prices.