Warren Bufet invests $5 Billion in Goldman Sachs: Berkshire Hathaway

As a signal to boost the confidence in the company as well as in the American Economy, World's best known investor has decided to pump in USD 5 billion in the recently FED regulated Goldman Sachs - which is the top Wall street bank remaining after the collapse of Lehman Brothers and Sale of Merrill Lynch. Goldman Sachs Group said it will receive a $5 billion investment from Warren Buffett's Berkshire Hathaway, a vote of confidence for the Wall Street bank from perhaps the world's best-known investor. News

Warren Buffet will buy $5 billion of perpetual preferred stock that carries a 10 percent dividend. It also will receive warrants to buy $5 billion of common stock at $115 per share, exercisable within five years, which could give it a roughly 9 percent stake in Goldman. Last week, Goldman said it averaged 448.3 million common shares in the quarter ended Aug 29. Goldman also said it plans to sell at least $2.5 billion of common stock.

Shares of Goldman were on the rise and went up 11 percent in after-hours trading following the announcement.
Goldman and rival Morgan Stanley said they would become bank holding companies, enabling them to accept deposits and killing the investment bank model that dominated Wall Street for decades. Morgan Stanley said it would sell up to a 20 percent equity stake, worth as much as $8.5 billion, to Japan's Mitsubishi UFJ Financial Group.