How Much Did Warren Buffett Make On His $5 Billion Goldman Investment?

warren buffett

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.

Though Buffett was dreading this day, Berkshire has still made a nice bundle on the stake; it earned approximately $3.7 billion, including paper profits, from the stake, Bloomberg reports.

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.)

Don’t miss: One Of These Six Men Will Succeed Warren Buffett >

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.