Berkshire Hathaway Inc. led by Warren Buffett said it would get more than USD2 billion in Goldman Sachs Group Inc. stock through warrants acquired during the global financial crisis in 2008.
Berkshire would receive around 13.1 million shares in Goldman Sachs. This was according to an agreement that used the average closing price on 10 days trading until today to calculate Buffet's stake. Goldman Sachs shares slumped 1% to USD158.21 at 4:15 p.m. in New York trading. This valued the holding at USD2.07 billion.
Goldman Sachs turned to Berkshire in 2008 to boost its capital and shore up market confidence when its shares plunged after the collapse of Lehman Brothers Holdings Inc. Berkshire's chairman and CEO, Warren Buffet, had invested USD5 billion for a preferred holding at Goldman. Buffet also got warrant to acquire USD5 billion of stock at USD115 per share piece.
Richard Cook, co-founder of Cook & Bynum Capital Management LLC said, "Buffett used his position as a white knight and his reputation to prop up an institution at a time of crisis. Goldman Sachs is almost certainly better off for it, even though it was very expensive. And certainly Berkshire shareholders are better off."
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