Buffett Exercises His BofA Warrants

Six years ago, Bank of America was hurting for cash. In jumped Warren Buffett and Berkshire Hathaway. They agreed to buy $5 billion worth of BofA preferred stock yielding 6%. That brought in a cool $300 million annually to Berkshire.

The deal also included warrants giving Buffett the option to buy 700 million shares of BAC common for $7.14 a piece. Bank of America just won approval to raise its dividend from 30 cents to 48 cents per share. That triggered Buffett to exercise his warrants. The current price of BAC is $24.32 per share. Not a bad deal!

This move will make Buffett the largest shareholder of BofA. He’s also the largest shareholder of Wells Fargo.

Posted by on June 30th, 2017 at 9:16 am

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