Goldman Sachs gets big boost from Buffett
If stocks go up this morning after two days of triple digit declines, it might be thanks in part to the Oracle of Omaha.
Warren Buffett announced late yesterday that he was buying a $5 billion dollar stake in Goldman Sachs, the giant Wall Street firm that is transforming itself into a commercial bank. It's a huge boost for the investment bank and its shares went way up in electronic trading.
Buffett's Berkshire Hathaway corporation will pick up $5 billion of Goldman's preferred stock. It also has warrants to buy another $5 billion in Goldman Sachs common stock.
In a Wall Street Journal article about the move, Davy Stockbrokers strategist Barry Dixon says, "Buffett is still regarded as one of the canniest investors in the industry, and his investment is seen as a sign that valuations could be close to the bottom."