Proactive Investors - Run By Investors For Investors

Warren Buffett bags US$12bn profit as he becomes Bank of America's largest shareholder

Legendary investor bags huge paper gain after exercising 700mln warrants
picture of Warren Buffett
That's why I'm a billionaire and you're not

Warren Buffett’s Berkshire Hathaway Group (NYSE:BRK.A) is to become the largest shareholder in Bank of America (NYSE:BAC) by taking up warrants  it received when it bought preference shares.

Buffett bought US$5bn worth of BoA preferred stock with warrants attached in 2011.

The 700mln warrants were exercisable at US$7.14 each  compared to a current market price of US$24.32.

The difference is equal to a book profit of about US$12bn.

Exercising the warrants will also give Berkshire a 6.6% stake in BoA, which puts it just ahead of the Vanguard Guard that before the warrant issue held 6.6% of the bank.

Shares have soared along with its peers in recent days as big dividend hikes were promised by the bank sector as nearly all its members passed the latest US central bank stress test with ease.

Shortly after the results, BoA said it intends to raise its annual dividend by 60% to 48c per share.



View full BAC profile View Profile

Bank of America Timeline

Related Articles

Russia picture
January 10 2018
The bulk of overall exposure is in credit and government bonds followed closely by equities.
different currencies
January 11 2018
The decision to complement its retail offering with a corporate service is quite literally paying off
wedding bands in gold
September 06 2017
Coinsilium's Terrastream platform could reshape the landscape of junior mining funding

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use