Fairholme’s Capital Bruce Berkowitz just made around $128.5 million since yesterday’s close in his stake with Bank of America, assuming he owns at least as many shares in the firm as he did on June 30th.This morning Berkshire Hathaway’s Warren Buffett announced he would purchase 50,000 preferred shares for $5 billion. The news pushed the stock price nearly 20% higher.
And Berkowitz, who believed in BofA so much that he hosted a conference call for Moynihan to convince critics they were wrong, cashed in.
Unlike John Paulson who dumped a significant portion of his stake in Bank of America, Berkowitz remained extremely bullish in the bank as of June 30, according to his fund’s latest 13F filing.
Berkowitz’s hedge fund had 99,647,755 shares, the filing said.
Yesterday Bank of America closed at $6.99 a share. Today the stock has been trading between a low of $8.28 and a high of $8.80, which means even at the stock’s lowest point he should have made at least $128.5 million.
While Bank of America’s stock price is down compared to June 30, this move by Buffett arguably could help restore confidence in the bank.
Rembember back in September 2008, Warren Buffett made a similar move when he made a $5 billion investment in Goldman Sachs in the midst of the financial crisis. That move ultimately helped restore confidence in the investment bank push the share price up over time.