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 …