It seems like not one day during our on going financial meltdown has passed without a new rumor that Warren Buffett and his Berkshire Hathaway were going to ride to the rescue of a financial firm with a huge capital injection. We’d grown so used to the answer to “Will Warren or Won’t Warren” always being “won’t” that we were frankly stunned to hear that this time he will.
We’re getting ahead of ourselves. Tonight news broke that Berkshire to invest at least $5 billion in Goldman Sachs. Berkshire is buying shares of preferred stock with a dividend of 10% that are callable at any time at a 10% premium. Berkshire is also getting warrants to purchase up to $5 billion of Goldman common stock with a $115 strike price. Goldman also plans to raise an additional $2.5 billion by selling common stock in a public offering.
Here's Goldman's press release.
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