Buffett invests in Goldman …

Berkshire Hathaway, Warren Buffett’s holding company, invests at least 5bln$ in Goldman Sachs.

Buffett buys 5bln$ of perpetual preferred stock issued by the investment bank. The securities pay a dividend of 10% and are callable anytime at a 10% premium, meaning Goldman can buy them back at the higher price.

He as well buys warrants to purchase $5 billion of Goldman common stock with a strike price of $115 a share. The warrants are excercisable over the next 5 years.

Goldman is raising capital by at least 2.5bln$ at the same time, issuing common stock.

Goldman stock jumped more than 8% on that news … US market bounced back by 1% in after hours …

Tags: Buffett, Goldman

This entry was posted on Mittwoch, September 24th, 2008 at 04:49 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.