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Title: Buffet Invests $5 Billion in Bank of America
Source:
New York Times
URL Source: http://dealbook.nytimes.com/2011/08 ... -5-billion-in-bank-of-america/
Published: Aug 25, 2011
Author: Andrew Ross Sorkin
Post Date: 2011-08-25 10:08:15 by Fred Mertz
Keywords: None
Views: 8328
Comments: 21
Warren Buffett comes to the rescue, again.
On Thursday, Berkshire Hathaway, run by Mr. Buffett, announced plans to invest $5 billion in Bank of America, a vote of confidence for the beleaguered financial firm.
The conglomerate has agreed to buy 50,000 preferred shares that will pay a 6 percent annual dividend. Bank of America has the option to buy back the shares at any time for a 5 percent premium. According to CNBC, Mr. Buffett approached Bank of America early Wednesday about a potential deal. Article Tools
The investment by Berkshire should help allay market concerns about Bank of America. Shares of the financial firm have been battered of late over fears the company lacks sufficient capital. The stock has fallen by nearly 30 percent since the beginning of August.
“I remain confident that we have the capital and liquidity we need to run our business,” Bank of America chief executive Brian Moynihan said in a statement. “At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”
Mr. Buffett has played the role of savior before.
In the depths of the financial crisis, Berkshire Hathaway gave Goldman Sachs a $5 billion lifeline, which came with a hefty 10 percent dividend. The investment bank paid back the money earlier this year after getting the greenlight from regulators.
When shares of General Electric got hit, Mr. Buffett stepped in with a $3 billion investment. The deal also came with a 10 percent annual payout.
With Bank of America, Mr. Buffett is once again jumping in at a point of weakness. Since the beginning of the year, the bank’s shares have dropped to less than $7, from $15. Last year, it was trading at more than $19.
“Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it,” Mr. Buffett said in a statement. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them. Bank of America is focused on their customers and on serving them well. That’s what customers want, and that’s the company’s strategy.”
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The conglomerate has agreed to buy 50,000 preferred shares that will pay a 6 percent annual dividend.
I see BAC (BofA) is up 16.6% at the moment.
#2. To: Fred Mertz (#0)
Not this time.
I wondered what had slammed the $....;}
First of all, BAc was lying that it did NOT, repeat NOT need ANY capital infusion.
And now it will need at least $20 billion more.
Didn't help the Markets for long.
What will be interesting is how the Markets do tomorrow as IRene forecasted to flood Wall St...
#3. To: Fred Mertz (#1)
I see BAC (BofA) is up 16.6% at the moment.
BAC is Insolvent.
Buffett's looking for QE3 and that is not coming.
And if by some miracle QE3 happens, the effect won;t even last to December.
#4. To: All (#3)
BTW, speaking of BailOuts,
Germany says the next one will involve the Sovereign's Gold as collateral and loss of fiscal sovereignty.
As Germany now realizes that this is all it needed to do in 1938. Plus Hire the Jews!!!! Don't kill 'em!....LMAO
#5. To: mcgowanjm, war (#2)
What will be interesting is how the Markets do tomorrow as IRene forecasted to flood Wall St...
I hope war has an evacuation plan prepared;^)
#6. To: Fred Mertz (#5)
I hope war has an evacuation plan prepared;^)
He said he had family in San Fran.
I'd head there.
13 ft of water to the Holland Tunnel and NYC's financial district will be non functioning for.... weeks?
#7. To: All (#6)
BTW, you can tell how serious this is.
None of the Talking Heads (the Weather TH's;} can utter the words:
Irene on track for NYC....
#8. To: mcgowanjm (#6)
He said he had family in San Fran.
LA
America...My Kind Of Place...
"I truly am not that concerned about [bin Laden]..."
--GW Bush
"THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!"
--Sarah Palin's version of "The Midnight Ride of Paul revere"
I lurk to see if someone other than Myst or Pookie posts anything...
#9. To: war, mcgowanjm (#8) (Edited)
http://pajamasmedia.com/weathernerd/2011/08/24/irene-a-real-threat-from-carolinas-to-maine-especially-in-nyc/
This article in the above URL has lots of info and historical facts FWIW. Plus some of the comments are worth reading from Katrina, etc. first hand experiences.
TooConservative posted the article on elPee and that's where I saw it.
#10. To: Fred Mertz (#9)
he should come over here...lately, he has to feel as if he's been dropped in the middle of Looney Toons central over there...
America...My Kind Of Place...
"I truly am not that concerned about [bin Laden]..."
--GW Bush
"THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!"
--Sarah Palin's version of "The Midnight Ride of Paul revere"
I lurk to see if someone other than Myst or Pookie posts anything...
#11. To: war, TooConservative, Brian S (#10)
I see he has an account here, but only 2 replies. I'll ping him. He posts good stuff kind of like Brian S does.
#12. To: war (#8)
LA
Thanx. Hope all are well....;}
:twisted:
The Laissez faire of the folks in the BosWash corridor only plays well until there's actually an Event.
Then it just translates to stupid.
They don't have a clue. And they won't have a clue. It would just cause panic. Until they start to see the wealthy leaving, and then it will be too late.
I wonder when we see the word 'Looter'. And if that person will be white or 'other'. White folks have a tendency to just take what they need.... :twisted:
And I keep thinking of those tourist on Jackson square 24 hors before Katrina hit. I can tell you right now that Bloomberg will NEVER get the Nagin treatment....just sayin'.
#13. To: hondo68 (#10)
Hey hondo, let TooConservative on elPee know that war would like to see him over here if you would be so kind. Maybe copy war's reply above to him. But don't post an active link or Goldi could accuse you of poaching, that insane woman. Thanks.
#14. To: mcgowanjm (#3)
Buffett's looking for QE3 and that is not coming.
You're smarter than Warren Buffet are you?
lolz.
#15. To: Fred Mertz (#13) (Edited)
Goldi could accuse you of poaching, that insane woman
Thanks for the tips on how to get banned at eLPee. ~<;^)
Why do I even worry about it.... ??? Well, it IS fun smacking around the neocon libtards over there.
libertypost.org/cgi-bin/r...i?ArtNum=312555&Disp=7#C7
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
#16. To: Thunderbird (#14)
You're smarter than Warren Buffet are you?
How's his Goldman investment looking?
That said, HUGE fan of Buffet's I am...
America...My Kind Of Place...
"I truly am not that concerned about [bin Laden]..."
--GW Bush
"THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!"
--Sarah Palin's version of "The Midnight Ride of Paul revere"
I lurk to see if someone other than Myst or Pookie posts anything...
#17. To: hondo68, war, Ibluafartsky, Skip Intro (#15)
Thanks Hondo, for delivering the message. I appreciate it. I used to be the messenger until Goldi whacked me in a stealth fashion.
I see yu-tard and banjo boy have their panties in a wad.
#18. To: Fred Mertz (#17)
I see yu-tard and banjo boy have their panties in a wad.
It seems to have brought out the grossest, nastiest homo innuendo from all the parties on that thread.
#19. To: mininggold, *Arab Spring Jihad* (#18)
seems to have brought out the grossest, nastiest homo innuendo from all the parties
That's "civil debate" at eLPee.
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
#20. To: war (#16)
How's his Goldman investment looking?
Looks like he cleared 500 million:
"In the depths of the financial crisis, Berkshire Hathaway gave Goldman Sachs a $5 billion lifeline, which came with a hefty 10 percent dividend. The investment bank paid back the money earlier this year after getting the greenlight from regulators."
#21. To: Thunderbird (#20)
His deal with BoA pays him $300MM a year...
America...My Kind Of Place...
"I truly am not that concerned about [bin Laden]..."
--GW Bush
"THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!"
--Sarah Palin's version of "The Midnight Ride of Paul revere"
I lurk to see if someone other than Myst or Pookie posts anything...
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