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Stories of Interest
- North Korean caught secretly mining bitcoin rival
- IPO Timelines Cut by 80% After SEC's Private Filing Decision
- How the Carried Interest Break Survived the Tax Bill
- FINRA: The Neutral Corner
- Coinbasex Says Buying and Selling Temporarily Disabled Amid Price Rout
- Bitcoin plunges by more than a third in a single day
- Goldman Is Setting Up a Cryptocurrency Trading Desk
- Jefferies Lets Employees Choose When to Receive Their Bonuses
- UBS Told to Pay $903K After Losing Retaliation Verdict
- BEWARE: Long Island Iced Tea Shares Soar After Changing Name to Long Blockchain
- Gary Cohn’s Last Laugh: Cashing Out on Trump’s Tax Plan
- E*Trade Lets Customers Trade in CBOE Bitcoin Futures
- Swiss Find Serious Shortcomings at JPMorgan in 1MDB Case
- Washington-based Investment Adviser and His Business Partner Charged in Multi-Million Dollar Scheme
- FINRA Board of Governors Meeting
- Cryptocurrency Market Now Doing Same Daily Volume as the NYSE
- Jailed Barclays Trader Must Pay $400,000 From Libor Profits
- Trump Asks ‘How’s Your 401(k)?’ But Most Voters Don’t Have One
- A Bitcoin Hedge Fund’s Return: 25,004% (That Wasn’t a Typo)
- Madoff Victims Near Full Recovery of Principal With Payout
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NEWSLETTERS & ALERTS
Warren Buffett’s BofA Deal Extends His Wall Street Empire
So, Warren Buffett’s Berkshire Hathaway is now the largest single shareholder of Bank of America. He recently converted his $5 billion holdings of BofA 6% preferred shares and warrants into 700 million shares of common stock. With BAC currently trading at $24.82 a share, Berkshire Hathaway’s holdings are now worth $17.34 billion.
Unrealized gains of $12.34 billion - not bad for a 6-year return on investment. And lest we forget that Berkshire Hathaway also took down $300 million each year in preferred share dividends.
BUFFETT’S SWEETHEART DEAL WITH BANK OF AMERICA. In August 2011 Buffett helped bail out Bank of America, whose shares had fallen 30% in the first 3 weeks of August over concerns the bank didn’t have enough capital. Berkshire Hathaway provided Bank of America with a $5 billion cash infusion, along with an implied imprimatur, or endorsement, from the most respected investor in America.
For his “troubles,” Buffett and Berkshire Hathaway received $5 billion worth of preferred shares that paid a 6% dividend. He also received warrants for 700 million shares of company stock - with an exercise price of $7.14, the price at which BAC shares then were trading. FYI - later that year, BAC’s market value dipped further as shares fell below $6. But of course, that was only temporary.
BERKSHIRE HATHAWAY’S OTHER WALL STREET HOLDINGS. Just so you don’t think that Warren Buffett is a one-trick pony - not that you would entertain such thoughts - it’s worth noting that Berkshire Hathaway has a well-diversified portfolio of Wall Street banks and financial institutions, that includes the following (as of 3/31/17):
- Wells Fargo – 480 million shares, or nearly 10% (biggest shareholder).
- US Bancorp – 85 million shares, or 5% (7th biggest shareholder).
- M&T Bank – over 5 million shares, or 3.5% (8th biggest shareholder).
- Goldman Sachs – nearly 11 million shares, or 2.8% (7th biggest shareholder).
- BNY Mellon – 33 million shares or 3.1% (8th biggest shareholder).
- American Express – over 151 million shares or 17%.