This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Coke Stock Split May Irk Warren Buffett

NEW YORK (TheStreet) -- For decades, Coca-Cola (KO) and Berkshire Hathaway's (BRK.A) Warren Buffett have had a successful relationship.

The mood may sour in the near term, however, as the soft-drink giant seeks approval for a 2-for-1 share split, a contentious topic for the famed billionaire.

Warren Buffett

Although Buffett has offered harsh words for companies that have considered stock splits and new share issuance, the Oracle of Omaha in recent years has encouraged a split for the Class B shares of Berkshire Hathaway (BRK.B).

A report from Bloomberg notes that Coca-Cola's chairman is pushing for what will be the company's 11th share split. The move is a bid to attract new investors and boost liquidity.

JPMorgan: The Apple of the Banking Sector >>

Although the company may be successful in its efforts, the Oracle of Omaha has warned in the past that these types of moves are ultimately detrimental to current shareholders. By flooding the market with excessive new supply, current stakeholders will see their power diluted. In addition, a share split may attract short-term-minded individuals who are not truly interested in the company's long-term prosperity.

Buffett has famously lashed out against other companies in which he held stakes when they have suggested the idea of boosting the availability of their stock.

In 2010, food giant Kraft (KFT) announced its intentions to purchase Cadbury, and the Nebraska native was quick to express his displeasure.

Buffett railed against the $19.5 billion plan. Among his reasons was Kraft's proposal to issue as many as 370 million shares to help pay for the bid.

Life Without Apple Is Still Peachy for Some Fund Managers >>

The investor ended up turning his words into action. In the middle of that year, the public learned that Buffett had slashed his exposure to Kraft, paring back his position by nearly 25%.

Interestingly, 2010 was also the year that Buffett pushed for and received shareholder approval to initiate a 50-for-1 share split on the Class B shares of Berkshire. This move was done in order to help Buffett's empire fund its landmark bid for Burlington Northern Santa Fe Railroad. Buffett has called this $34 billion dollar acquisition -- the largest in Berkshire's history -- an "all-in" wager on the U.S. economy that will benefit shareholders for years to come.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs