Berkshire Hathaway Inc. shares fell Monday after Chairman Warren Buffett said he would give most of his $44 billion fortune to the Bill & Melinda Gates Foundation and other charities.
“Those who are selling haven’t thought this through,” said Thomas Russo, a principal at Gardner, Russo & Gardner, which invests 8 percent its nearly $3 billion of assets in Berkshire.
“Though there may be more shares on the market, Warren will no longer have to distract himself with charitable donations, and can focus on the company,” Russo said.
Berkshire Class A shares fell $1,750, or 1.9 percent, to $90,350, while its Class B shares fell $63.01, or 2.05 percent, to $3,008.
The move is the 75-year-old Buffett’s latest step in preparing for his eventual departure from Omaha, Nebraska-based Berkshire, the $142 billion insurance and investment company he has led since 1965.
Buffett, the world’s second richest person after Bill Gates, announced the donations on Sunday, less than four months after he said Berkshire’s board had identified a successor for him when one is needed.
The donations amount to roughly 85 percent of Buffett’s net worth, and constitute the largest single act of charitable giving in the United States.
Buffett pledged 10 million Berkshire Class B shares, valued on Friday at $30.7 billion, to the Gates Foundation. That would double its size to about $60 billion, exceeding the gross domestic product of Kuwait.
Buffett also pledged 1 million Class B shares to a foundation in the name of his late wife, Susan, who died in 2004. In addition, foundations for Buffett’s three children — Susie, Howard and Peter — will each receive 350,000 Class B shares.
Buffett said in a letter to the Gateses: “My doctor tells me that I am in excellent health, and I certainly feel that I am.”
Earlier in June, 50-year-old Bill Gates said he plans in two years to step down from his day-to-day role at Microsoft Corp., the software company he co-founded and where he remains chairman, to concentrate on his foundation.
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The Gates Foundation has contributed millions to fighting diseases and reducing poverty in developing countries, and to improving education and increasing access to technology in public libraries in the United States.
“Bill Gates and Warren Buffett are rock stars of business,” said Jay Fishman, a business valuation consultant specializing in celebrities at Financial Research Associates in Bala Cynwyd, Pennsylvania. “Combined with the enormous amount of money to give away, it gives them a big reservoir of goodwill.”
Buffett took over Berkshire in 1965 when it was a struggling textile maker.
It now owns large stakes in such blue-chip companies as American Express Co. and Coca-Cola Co.. It also owns about 50 businesses, many with well-known brand names, including Dairy Queen ice cream, Fruit of the Loom underwear and Geico auto insurance.
Through Friday, Berkshire Class A shares had risen 10 percent in the last year, topping the 7 percent gain in the KBW Insurance Index.