Thursday, August 25, 2011

Buffett Gives Bank of America Substantial Boost. Warren Buffett to Invest $5 Billion in BAC.

According to Canada's Globe and Mail:

"Warren Buffett will invest $5-billion (U.S.) in Bank of America (BAC), stepping in to shore up the company in the same way he helped prop up Goldman Sachs and General Electric during the financial crisis. Bank of America shares rose 12.3 per cent to $7.85 in early trading, erasing some part of the stock’s August losses. The jump also makes the warrants for Bank of America shares that Mr. Buffett gets in the deal instantly profitable."

"Mr. Buffett and Bank of America said he made an unsolicited call to the bank on Wednesday morning, offering to make an investment. Even though the bank has said it did not need to raise capital, investors widely believed Bank of America needed more money and to show it could raise funds easily."

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