Warren Buffett’s company, Berkshire Hathaway, a conglomerate holding company, is buying 700 million shares in Bank of America, the second largest bank in the United States. This transaction makes Buffett the largest shareholder in two of the nation’s largest banks, the other being Wells Fargo. In 2011, billionaire investor, Warren Buffett, bought preferred shares in Bank of America for $5 billion dollars after shares tanked from the 2008 financial crisis. Proving to be a shrewd investment, Buffett’s company announced plans on Friday to exercise warrants in the bank to allow him to convert his preferred shares into 700 million common shares at only $7.14 as Bank of America is now trading at over $24 a share. This move was announced with Bank of America’s common shares paying out 48 cents, above the 44-cent equivalent in its preferred stocks. This amounts to a $12 billion profit for Buffett. Berkshire will now roughly have a 7% ownership stake, ahead of Vanguard Group, the second largest shareholder with 6.6% at 652.4 million shares. Just one year ago, Bank of America shares were sitting at $12 and now shares of Bank of America were up 16 cents at $24.48 in early trading on Friday, up 0.3%.
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