Wow so does Buffett really own 10% of Goldman Sachs now?
Berkshire just put $5 billion into the company!
Answers
195 points
Informer answered one year ago …
It doesn't look like he bought a chunk of common stock. It appears he bought $5 billion of preferred stock that can be bought back by Goldman at any time. They pay Buffett 10%, however.
He also has warrants to buy $5 billion worth of stock at $115 per share at any time over the next 5 years.Which means if the stock stays above $115 per share (and not counting the $2.5 billion stock offering Goldman's about to perform) then he would own 10% of Goldman.
Buffett is great with investments in financial services (Geico, GeneralRe, etc.) and his last investment in Wall Street was his purchase of Solomon back in 1991 - which he later sold to Sandy Weill over at Citigroup for a tidy profit.
2183 points
ChaosNantuko answered one year ago …
Its interesting to note that buffet used warrants. Warrants are almost exactly like stock options. This indiates that buffet knew this was risky, and wasn't willing to take the full risk of owning too much of this stock. Instead, he used warrants (options) to profit from any upside, while limiting his downside risk. But yea, informer has the exact details.
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