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re: Cash out on BAC?
Posted on 3/7/13 at 11:17 am to ShreveportTIGER318
Posted on 3/7/13 at 11:17 am to ShreveportTIGER318
I just bought some BAC at the low 11s. I'll be holding for a while. I heard Warren Buffet is all over BAC too. That guy knows what he's doing.
2
Posted on 3/7/13 at 11:24 am to BigTyminLSU
quote:
Warren Buffet
quote:
That guy knows what he's doing
You don't say...
Posted on 3/7/13 at 11:30 am to BigTyminLSU
quote:
I heard Warren Buffet is all over BAC too.
He made a five billion dollar investment in BAC during their dark days when some people thought BAC might go bankrupt as a result of their Country Wide Mortgage acquisition and portfolio of sour house loans.
Under the terms of the deal, Berkshire bought $5 billion of preferred stock that pay a 6 percent annual dividend, and receive warrants for 700 million shares that it can exercise over the next 10 years. Bank of America has the option to buy back the preferred shares at any time for a 5 percent premium.
When you hear Uncle Warren talk up BAC don't doubt the fact that he may be interested in protecting his investment....
ETA: Based on today's price of BAC stock, Berkshire's warrants give the $5 billion investment a profit of about $3.5 billion excluding the 6% dividend on the preferred stock. Not a bad return after 2 years.
This post was edited on 3/7/13 at 11:37 am
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