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In big vote of confidence, Buffett’s Berkshire buying at least $5 billion stake in Goldman
Wednesday, September 24, 2008 | No comments posted.
OMAHA, Neb. (AP) — One of the world’s shrewdest dealmakers is betting $5 billion of his investors’ money that the U.S. financial system is not about to collapse.
Warren Buffett’s Berkshire Hathaway Inc. said Tuesday it investing at least $5 billion in Goldman Sachs Group Inc., a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.
In addition to buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman’s common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering.
The news sent shares of Goldman Sachs and stock index futures soaring in electronic trading, after the Dow Jones industrial average posted a triple-digit decline for the second day in a row.
It also could lead to new probing questions from lawmakers for Treasury Secretary Hank Paulson, a former co-CEO of Goldman Sachs. He and Federal Reserve Chairman Ben Bernanke told Congress hours earlier that quick action on a $700 billion bailout measure for financial services firms was needed to prevent economic havoc.
Warren Buffett’s Berkshire Hathaway Inc. said Tuesday it investing at least $5 billion in Goldman Sachs Group Inc., a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.
In addition to buying $5 billion in preferred stock, Berkshire also got warrants to buy another $5 billion in Goldman’s common stock. Goldman also said late Tuesday it would raise another $2.5 billion in its own public stock offering.
The news sent shares of Goldman Sachs and stock index futures soaring in electronic trading, after the Dow Jones industrial average posted a triple-digit decline for the second day in a row.
It also could lead to new probing questions from lawmakers for Treasury Secretary Hank Paulson, a former co-CEO of Goldman Sachs. He and Federal Reserve Chairman Ben Bernanke told Congress hours earlier that quick action on a $700 billion bailout measure for financial services firms was needed to prevent economic havoc.
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