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01-07-2017, 05:27 PM
Buffett Is About to Make $12 Billion on His Bank of America Bet
By Noah Buhayar and Katherine Chiglinsky
June 30, 2017, 7:18 PM GMT+8 Updated on June 30, 2017, 8:28 PM GMT+8
Warren Buffett’s bet on Bank of America Corp. is about to pay off with a roughly $12 billion windfall.
The billionaire plans to exercise warrants obtained six years ago in a vote of confidence in Bank of America while its shares were tumbling amid multibillion-dollar probes tied to the housing meltdown. The cash infusion helped the bank put to rest doubts about whether it had enough capital, and its shares have more than tripled since then.
In the 2011 deal, Buffett’s Berkshire Hathaway Inc. invested $5 billion in Bank of America in exchange for preferred stock and the right to buy 700 million common shares, a stake now worth $17 billion. Berkshire said in a statement Friday that it would convert its preferred shares into common stock once the Charlotte, North Carolina-based bank increases its dividend, now planned for the beginning of the third quarter.
More details in https://www.bloomberg.com/news/articles/...n-of-stock
By Noah Buhayar and Katherine Chiglinsky
June 30, 2017, 7:18 PM GMT+8 Updated on June 30, 2017, 8:28 PM GMT+8
Warren Buffett’s bet on Bank of America Corp. is about to pay off with a roughly $12 billion windfall.
The billionaire plans to exercise warrants obtained six years ago in a vote of confidence in Bank of America while its shares were tumbling amid multibillion-dollar probes tied to the housing meltdown. The cash infusion helped the bank put to rest doubts about whether it had enough capital, and its shares have more than tripled since then.
In the 2011 deal, Buffett’s Berkshire Hathaway Inc. invested $5 billion in Bank of America in exchange for preferred stock and the right to buy 700 million common shares, a stake now worth $17 billion. Berkshire said in a statement Friday that it would convert its preferred shares into common stock once the Charlotte, North Carolina-based bank increases its dividend, now planned for the beginning of the third quarter.
More details in https://www.bloomberg.com/news/articles/...n-of-stock
Specuvestor: Asset - Business - Structure.