Buffett again reached the sum of creative financial transactions, the deal is not only favorable to Buffett and Berkshire Hathaway (BRK-B) shareholders also benefit counterparties.
He plans to use its 4350 million shares of Goldman Sachs (GS) warrants in exchange for 10 million shares of Goldman stock, which is equivalent to not spend a penny on to become the largest shareholder in Goldman Sachs. Buffett Goldman preferred shares purchased during the financial crisis in 2008 and at the same time to get these warrants, preference shares his annual $ 500,000,000 dividend These preference shares have been redeemed in 2011.
Calculated according to Goldman Sachs, the current stock price, the value of these warrants was $ 1.47 billion.
Buffett stock with warrants for creative Goldman Sachs to avoid the dilution of the equity. Goldman Sachs is now simply additional 2% of the new shares, and if Buffett execute warrants, Goldman Sachs will have additional 9% of the new shares. The reduction in the number of outstanding shares of more help Goldman Sachs to buy back shares.
Yahoo Finance Breakout presenter Matt Nesto, "Buffett has done the pen good business results is perfect for both sides."
The Daily Ticker host Aaron Task, Buffett has fell into financial stocks, "In addition to Goldman Sachs, Buffett also holds a lot of Wells Fargo Bank (WFC) Bancorp (USB) and American Express (AXP) shares his 2008 the year also reached a similar agreement with Bank of America (BAC). "
Task said, "When Buffett declared that the U.S. banking situation has long been never been such a good time, he said his investment in the bank."
However, the U.S. banking industry is not without risk. According to the Wall Street Journal reports, the banks in the world, faced with the financial crisis and the manipulation of interbank offered rate scandal related litigation compensation for the losses.
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