Warren Buffett comes to the rescue, again.Here's the press release.
On Thursday, Berkshire Hathaway, run by Mr. Buffett, announced plans to invest $5 billion in Bank of America.
The conglomerate has agreed to buy 50,000 preferred shares that will pay a 6 percent annual dividend. Bank of America has the option to buy back the shares at any time for a 5 percent premium.
The investment by Mr. Buffett should allay concerns by the market that Bank of America lacks sufficient capital. Shares of the financial firm have been battered by recent weeks over liquidity fears. The stock is currently trading at $7, down from more than $15 at the beginning of the year.
“We are building the best franchise in financial services and we have laid out a clear plan to deliver long-term shareholder value,” Bank of America chief executive Brian Moynihan said in a statement. “I remain confident that we have the capital and liquidity we need to run our business. At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”...MORE