1996: Can investors buy Berkshire shares directly from Berkshire?

AUDIENCE MEMBER: Good morning. I’m Rena Lowie (PH) from Chicago, proud to be here. At mic —

WARREN BUFFETT: Where are we? Oh, over here. OK.

AUDIENCE MEMBER: I have a question that’s been asked me, and I really don’t know. Several people wanted to know if they could buy directly from the company.

WARREN BUFFETT: The answer to that is no. But Salomon Brothers is the underwriter of the issue. They have a hundred and, I think, 37-or-something broker-dealers, all — virtually all — the major ones in the country, in the selling group.

The cost to the company of doing this are really very, very low compared to any issue I’ve seen. When AT&T had their spinoff — or sale of Lucent — which was close to a $3 billion deal — you know, their percentage costs were more than double what our costs will be, for example, on this offering of Berkshire.

So, it’s almost as if you’re buying it — a Class B holder — is buying it from us, in terms of the, what I would call the frictional costs involved of getting the issue done. In fact, if we handled it ourselves, it might cost more.

But the company, itself, is not a broker-dealer. And it’s — it would require a whole group of different hoops to jump through in order to have a direct issue. It will be sold only through broker-dealers.