Not too shabby! Warren Buffett may have earned $1.3 billion in one day on his $5 billion investment in Bank of America Corp., Bloomberg writes.
The preferred shares Buffett’s Berkshire Hathaway Inc. (BRK/A) bought are worth about $3.53 billion, Phil Jacoby, chief investment officer at Spectrum Asset Management Inc. in Stamford, Connecticut, estimated. Warrants included in the deal are worth about $2.73 billion, based on Bank of America’s share price of $7.65 as of 4:15 p.m. in New York trading, said Clay Struve, a partner with Chicago-based CSS LLC.
The 25 percent first-day return -- more than 9,000 percent on an annualized basis -- shows the premium Bank of America Chief Executive Officer Brian T. Moynihan was willing to pay to attract Buffett as an investor. As Berkshire’s CEO, Buffett has garnered a reputation as one of the world’s best investors, with shareholder returns over the past decade that are more than double those of the Standard & Poor’s 500 Index.
Read all about it at http://www.bloomberg.com/news/2011-08-25/buffett-s-bank-of-america-stakes-net-1-4-billion-in-profit-on-first-day.html
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