I expect the succession question to be asked again in the Berkshire Hathaway 2025 annual meeting. Buffett himself already explained (see the video below) why BRK stocks price can go up tomorrow if he passes away today.
https://youtu.be/YP8VyvLfwYg
Some of my additional thoughts are below:
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Removal of "Key Person Risk" Discount: Currently, a portion of BRK's stock valuation might be discounted due to the "key person risk" associated with Warren Buffett. His exceptional track record and influence are undeniable. Upon his passing, this specific risk factor would be removed. Some investors who were hesitant due to this concentration of influence might then find the stock more attractive.
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Potential for Restructuring and Streamlining: While Buffett has built an impressive and diversified conglomerate, a new management team might decide to streamline operations, sell off non-core assets, or implement strategies that could be perceived as unlocking further value. This could lead to increased investor enthusiasm.
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Increased Index Inclusion Weighting: Buffett's significant personal stake in Berkshire Hathaway sometimes limits the stock's weight in major indexes. Upon his passing and the likely distribution of his shares (primarily to philanthropic organizations that would likely sell portions over time), the stock's free float could increase. This might lead to greater inclusion weighting in indexes, driving demand from passive investment funds.
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Focus on Younger Leadership: The designated successor, Greg Abel (as of May 2024), is decades younger than Buffett. Some investors may view this transition to a potentially more dynamic and longer-tenured leader as a positive catalyst for the company's future. Abel has been taking on more responsibilities and has expressed commitment to Berkshire's principles.
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