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Stories of Interest
- Deutsche Bank ‘Beyond Repair’ as Trading Drops - Autonomous Research
- Guggenheim Partners CEO Might Step Down
- Wachovia Customer Sues Wells Fargo Over FundSource Losses - Bill Singer
- Credit Downgrade for Wells Fargo Due to Fake Account Scandal
- CFTC Commissioner Quintenz Named Sponsor of the Technology Advisory Committee
- Harbour and Geneos Customers Win FINRA Arbitration Against Stockbroker - Bill Singer
- Equifax Suffered a Hack Almost Five Months Earlier Than the Date It Disclosed
- The World’s Biggest Wealth Fund Hits $1 Trillion
- At Jefferies, Like Wall Street, Trading Cedes to Banking
- Ex-SAC Trader Who Pleaded Guilty to Insider Trading Just Remembered He’s Innocent
- JPMorgan Turns to Amazon for Retail 'Customer Experience'
- Goldman Sachs Names Ken Hitchner as New Chairman for Asia Pacific
- Judge All but Tosses SEC Case Against ‘Rogue’ Trader And Ex-FBI Informant Guy Gentile
- 'Boys are #1 Among NFL's Most Valuable Teams
- Fake Tax Returns - Your Next Worry After the Equifax Breach
- FINRA DR Recruiting Arbitrators, Mediators at Congressional Black Caucus Conference
- JPMORGAN: Here's who we think will replace Warren Buffett at Berkshire Hathaway
- Mueller to Search Facebook for Russia-Linked Accounts
- Mark Gomes, Market Analyst and Trade Scalper Settles with SEC
- Equifax Waives Credit Lock Fees For Consumers, Amid Criticism
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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%.