By: Brandon Rowley Wednesday, September 09, 2009 11:20 PM
Warren Buffett's decision for a large investment in Goldman Sachs last September amazed many in the financial community. Buffett stepped in to buy $5 billion in preferred stock in a month that saw the collapse of venerable giant, Lehman Brothers, the government takeover of mortgage behemoths, Fannie Mae and Freddie Mac, and the large-scale bailout of AIG
: 38.89, 3.04.
Buffett's deal for $5 billion in preferred stock paying a 10% annual dividend included a redemption premium of $500 million and warrants enabling the purchase of 43.48 million shares exercisable at $115 anytime before October 2013.
Buffett was soon scoffed as an idiot as GS shares plummeted falling from $125 to below $50 per share. But, good ol' Warren is having the last laugh now with his holding conservatively estimated at $8.35 billion.
Buffett's investment has returned conservatively 67% in roughly 11 months should Buffett exercise today. Quite the investment indeed!
: 38.89, 3.04.Buffett's deal for $5 billion in preferred stock paying a 10% annual dividend included a redemption premium of $500 million and warrants enabling the purchase of 43.48 million shares exercisable at $115 anytime before October 2013.
Buffett was soon scoffed as an idiot as GS shares plummeted falling from $125 to below $50 per share. But, good ol' Warren is having the last laugh now with his holding conservatively estimated at $8.35 billion.
| Investment | Measurement | Total Value |
| Preferred Stock Dividend | $5 billion * 10% * (11/12) | $458 million |
| Warrants | 43.48 million shares * ($170 - $115) | $2.391 billion |
| Redemption Premium | $500 million | $500 million |
| Total | $3.35 billion |
Buffett's investment has returned conservatively 67% in roughly 11 months should Buffett exercise today. Quite the investment indeed!
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