Warren Buffett’s $5 billion investment — emergency loan — in Goldman Sachs back in September of 2008, clearly paid off.
Yesterday, Goldman announced it would be redeeming the $5 billion in preferred shares it sold to Berkshire Hathaway.
That $3.7 billion includes about $1.27 billion in dividends (at a rate of 10%, which generated about $500 million a year).
But that’s not all.
The WSJ calculated Buffett’s “gross windfall” at $8.7 billion.
Buffett also is holding onto the right to buy [$5 billion] Goldman common stock at $115 a pop… At Goldman’s current stock price of just under $160, Buffett’s paper gain on the stock is more than $1.9 billion. Of course, those shares can go up or down in value.
(As some readers have pointed out that, Buffett’s investment gain isn’t $8.7 billion. Right now, Buffett has made a 70% return on his $5 billion investment, assuming the common stock warrants were exercised and sold today.)
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