Remember, this is the guy who has maintained forever that stock splits are inherently wrong, in that they're nothing other than a game.

Well, yes.  But under the cover of the claim that he wants BNI shareholders to "enjoy" a tax-free exchange, suddenly Berkshire "gets religion" and splits the "B" shares 50:1?

Uh, Warren.  This is a stock and cash deal, right?  What prevented you from issuing a "C" share?  Nothing, other than dilution, which you could handle with an immediate buyback of the outstanding amount necessary to balance it.

Here's my view, for what it's worth - BNI at yesterday's closing price was reasonably valued at a P/E of 14.  At the deal price it's about 20.  That's too high, unless you believe that manufacturing is coming home in massive numbers, and that "indefinite growth" is coming back.

I think Warren's wrong on valuation.  I also think he should have bought BNI back in March, when the stock price was under $51, and paid $70, which would have been an even bigger premium in percentage terms and been a better deal for Berkshire shareholders:

Here's Berkshire's "B" share chart (the "A" is the same, just bigger numbers):

If you're a BNI shareholder, I'd be taking the money - this morning.  You're no longer the owner of a big industrial mover; you're now the owner of stock in what amounts to a financial conglomerate trading with a P/E of 52 (as of this morning), where you had a P/E of 14 last night.  Worse, Berkshire's market cap is being "invaded" tremendously by this acquisition, turning Berkshire from a financial company (in the main; banking and insurance) into a multi-line conglomerate with a HUGE transportation component.

Mean reversion is going to suck WHEN it occurs, and this much is certain - you didn't own BNI expecting it to have a P/E of 52, but suddenly it does, and anyone who believes that a conglomerate with 25% of it's total market cap comprised of "railroad" should trade at anywhere near a P/E of 52 has rocks in their head.

Buffett's comment: "This is a bet on the future of the country, 5, 10, 20 years from now."

That's Berkshire's and Buffett's mantra, and in addition this is a bet that rails will be the big winner over time in terms of moving products in a world that is increasingly hamstrung by both energy constraints and (in my view insane) "global warming" nonsense. 

I think Warren is right on who wins in the transportation matrix in the future, but he doesn't care about multiples. 

I, as an investor, do.

If I owned either of these firms (I don't) I'd be a seller this morning into the ramp job, especially if I held BNI.  Nobody in their right mind trades a P/E of 14 for a P/E of 52.

Disclosure: No position.