Berkshire Profit on Goldman Sachs Passes $2 Billion
July 23 (Bloomberg) -- Warren Buffett’s option to buy shares of Goldman Sachs Group Inc., part of an agreement reached at the depths of the credit crisis, has earned a profit on paper of more than $2 billion, a return of about 44 percent.
Goldman Sachs today passed $162 in New York trading for the first time since rival Lehman Brothers Holdings Inc. collapsed in September. Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. holds warrants to buy $5 billion of Goldman common stock for $115 a share any time in the next four years.
“It must feel good to be Warren Buffett,” said Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington, who has studied the billionaire’s investing history. “That number just flies in the face of people who like to say he’s lost a step.”
Plus Berkshire is getting 500 million a year in interest payments on the preferred.