Berkshire Hathaway Class A Shares - Too High a Price for the Exchanges

https://www.wsj.com/articles/berkshire-hathaways-stock-price-is-too-much-for-computers-11620168548

Berkshire Hathaway Inc. is trading at more than $421,000 per Class A share, and the market is optimistic. That’s a problem.

The price has grown so high, it has nearly hit the maximum number that can be stored in one common way exchange computers handle digits.

On Tuesday, Nasdaq Inc. temporarily suspended broadcasting prices for Class A shares of Berkshire over several popular data feeds. Such feeds provide real-time price updates for a number of online brokerages and finance websites.

Nasdaq’s computers can only count so high because of the compact digital format they use for communicating prices. The biggest number they can handle is $429,496.7295. Nasdaq is rushing to finish an upgrade later this month that would fix the problem.

It isn’t just Nasdaq. Another exchange operator, IEX Group Inc., said in March that it would stop accepting investors’ orders in Class A shares of Berkshire Hathaway “due to an internal price limitation within the trading system.”

It’s the stock-market version of the Y2K bug. And it’s becoming an increasingly urgent issue as shares of Warren Buffett’s company have risen more than 20% this year, buoyed by a rising market and a return to profitability after fallout from the Covid-19 pandemic in 2020.

Here’s the trouble: Nasdaq and some other market operators record stock prices in a compact computer format that uses 32 bits, or ones and zeros. The biggest number possible is two to the 32nd power minus one, or 4,294,967,295.

Stock prices are frequently stored using four decimal places, so the highest possible price is $429,496.7295.

I mean, bitcoin is probably going to hit that number soon.

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It would be hilarious if they were forced to split because of this issue.