Tuesday, March 26, 2013

Buffett is on His Way to Becoming One of Goldman Sachs' 10 Largest Shareholders.

Goldman Sachs announced today that Warren Buffett's firm Berkshire Hathaway would receive a large block of the investment bank's stock in October.

It's the outcome of Buffett's $5 billion emergency cash infusion into Goldman at the height of the financial crisis in 2008, when Wall Street firms were frozen in panic after the bankruptcy of investment bank Lehman Brothers

At the time, Buffett received preferred shares worth $5 billion that paid a dividend of $500 million annually. He also got warrants to buy 43 million shares of Goldman stock for $115 apiece by October of this year. If Buffett were to cash in at Goldman's current stock price of around $145, his stake would be worth $6.3 billion, a profit of $1.3 billion.

But Goldman and Buffett said they had revised the options so that Berkshire will receive shares equal in value to that profit. At current stock prices, that would mean an additional 9 million shares. It would be enough to rank Buffett as Goldman's ninth largest shareholder, according to LionShares, a stock tracking service.

Of course, Buffett had crony-like timing, when he made the investment. Within 24 hourss, the Treasury announced it was going to step-in and infuse financial institutions like Goldman to the tune of hundreds of billions of dollars.


  1. You can't lose when you get bailed out by the taxpayers. This is what passes for financial genius these days?

  2. True masters of the universe, eh?