This just in....
Warren Buffett is investing $5 billion in Bank of America, putting the Oracle of Omaha’s golden seal of approval on the battered banking giant.
Remember that Buffett rode to the rescue of several besieged financing giants during the financial crisis, investing in Goldman Sachs and General Electric, among others, during the heat of financing panic in 2008 and 2009.
Buffett’s seal of approval is legendary and he charges a fortune for it. He’s buying 50,000 preferred shares of Bank of America at a dividend of 6% a year. He’s also receiving warrants on 700 million shares at a strike price of about $7.14 a share. Those warrants would have been out of the money yesterday, but will be in the money as soon as markets open. The deal will make Buffett one of Bank of America’s biggest shareholders.
Futures have spiked as a result...Look for a big rally in bank shares.
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