Berkshire to invest at least 5 billion dollars in Goldman SachsSeptember 24th, 2008 - 5:30 pm ICT by ANI
Washington, Se4p 25 (ANI): Berkshire Hathaway has agreed to invest at least 5 billion dollars in Goldman Sachs Group, with billionaire investor Warren Buffett backing a Wall Street firm thats begun transforming itself into a more-stable banking business.
In addition to buying 5 billion dollars in preferred stock, Berkshire also got warrants to buy another 5 billion dollars in Goldmans common stock. Goldman said on late Tuesday that it would raise another 2.5 billion dollars in its own public stock offering.
The news sent shares of Goldman Sachs and stock index futures soaring in electronic trading, after the Dow Jones Industrial Average posted a triple-digit decline for the second day in a row, CBS News reported.
It also could lead to new probing questions from lawmakers for Treasury Secretary Hank Paulson, a former co-CEO of Goldman Sachs.
He and Federal Reserve Chairman Ben Bernanke told Congress hours earlier that quick action on a 700 billion dollars bailout measure for financial services firms was needed to prevent economic havoc.
The legislation that the Bush Administration is seeking would allow the government to buy bad mortgages and other troubled assets held by endangered banks and financial institutions.
Goldman Sachs” shares had been tumbling ahead of the announcement of the government rescue plan last Friday as investors feared it could face the same kinds of funding squeezes as Bear Stearns and Lehman.
Now members of Congress have to deal with a plan while it looks to many taxpayers like Wall Street is already cashing in.
Buffett, one of the most successful investors in history, made no mention of what is happening in Washington, but he did heap praise on the New York-based company. (ANI)
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