Shares of Bank of America are up 4 per cent today, and the stock is now at $9.20.This brings to mind the fact that Warren Buffett is on his way towards making another killer investment.
Last August he sunk $5 billion into the bank while it looked like it was in another spiral, and the stock was just above $7.
Now bear in mind, he didn’t just buy common stock.
He bought preferred stock paying 6 per cent returns and the right to buy a whopping 700 million shares at $7.14.
So suffice to say, this is another home run.
It’s also worth noting that the stock fell fairly sharply after Buffett’s move (dropping briefly below $5 in late December) and everyone wondered whether he blew it. Well, he didn’t, and the stock has just been on a tear this year.
Well done, Warren.