Posted on 08/25/2011 7:20:24 AM PDT by SeekAndFind
Buffett's Berkshire has agreed to buy 50,000 preferred shares of Bank of America for $5 billion.
That means he's paying $100,000 per share. He also has options to buy 700 million. That's 7% dilution for shareholders.
Buffett says it's not just a vote of confidence in Bank of America, but in the U.S., according to Becky Quick on CNBC.
It's a better deal for Bank of America than Buffett gave to Goldman Sachs in some ways, he says.
And get this - he dreamt up the idea to invest in Bank of America yesterday - in the bathtub.
Bank of America is up 24.32% so far. But it's still nowhere near where it was months ago.
Word is that Treasury did not have a hand in this monumental move for Bank of America, based on Buffett's comment that he called Brian Moynihan.
Jim Cramer called this yesterday. He suggested that Berkshire find an angel investor like Warren Buffett or Prince Alwaleed.
It's monumental for the company, he's saying on CNBC right now.
JPMorgan had suggested in a research report that a credit positive event was likely.
(Excerpt) Read more at businessinsider.com ...
BofA is a long-time cash cow for the DIMocRAT party.
Wonder how hard Zero had to lean on Buffett before Buffett threw out this lifeline.
This wouldn’t be insider trading would it? Naaa, didn’t think so. Just move along.
Buffett has become a political tool - but I think this is also a sign to BUY BAC Stock.
This is just like his investment in Goldman. Buffett would not put his money into BAC unless he had commitments from Bernanke and Geithner that they will use their full power to make sure BAC survives. Too big to fail, Baby!!
Good point.
I hope Buffet eats this one. Can’t stand the guy. Can’t stand Soros either but at least Soros is smart. Buffet applied simple stock market logic, got in at the right time, and now he thinks he’s some sort of financial guru.
bump.
This isn’t good news for the stock or financial market. It just confirms that Banco d’Amigo is busted, but too big to fail..and to big not to profit. Buffett is going to take the ride. Frankly, I was considering buy BAC this last week—figuring that the Fed and Treasury weren’t about to let them go down. Now it may be a bit to expensive.
Is Warren Buffet "too big to fail?"
It is October 1929 all over again.
On October 24, 1929, several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. They chose Richard Whitney, vice president of the Exchange, to act on their behalf. With the bankers’ financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market.
As we all know now, the relief was very temporary.
this is not going to change bank of america.
bad service the same as always.
mortgage fiasco still a massive problem.
this is not buffet betting on the usa, this is buffet selling his name and betting on too big to fail.
Good news!
When the US bails out BofA we’ll need 5 billion less to do it, now.
Even if the investment works out it really looks bad for WB’s reputation. He didn’t decide until after Zero called him. You can be assured there’s a deal under table. If Zero also owns BAC stock then this should be considered a campaign contribution at the very least.
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