Article Image
News Link • Economy - Economics USA

Berkshire Hathaway Invests $5 Billion in Bank of America


 Warren Buffett's Berkshire Hathaway will invest $5 billion in Bank of America, stepping in to shore up the company in the same way he helped prop up Goldman Sachs during the financial crisis.

Bank of America [BAC 7.72 0.73 (+10.44%)  ] shares rose 24 percent to $8.65 in early trading, erasing a large part of the stock's August losses.

 "This helps with the credibility gap that I think has existed in the minds of some shareholders. It reiterates the point that the balance sheet is healthy. They needed an endorsement in the market and they got it," said Jon Finger, managing partner of Finger Interests in Houston.

 Bank of America will sell Berkshire [BRK.A 103621.0078 -2728.9922 (-2.57%)  ] 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend, it said in a statement Thursday. Bank of America can buy back the investment at any time by paying Buffett a 5 percent premium.

Join us on our Social Networks:


Share this page with your friends on your favorite social network: