Warren Buffett = Extortionist? Loan Shark?

Once again, Buffett picks up a sweetheart deal, this time at GE, with the same terms apparently as his Goldman Sachs investment.  $3B in perpetual preferred shares @ 10% yield + warrants to purchase $3B in stock (I don’t know what the strike price is on these $22.25 at any time during a 5-year period).  As with Goldman Sachs, this Buffett offering includes an additional equity offering of $12B.

As a GE shareholder, I’m kinda miffed.  This seems a high price to pay for confidence and why aren’t other shareholders (me!) offered the same opportunity?

The stock is halted.  Interesting to see where it goes from here.  Even if Buffett does boost confidence in GE, the boost may be short-lived, just as it was with Goldman Sachs.  Can’t someone introduce Buffett to another media heiress or something and keep him away from my portfolio?

Yuck.

More on this topic (What's this?)
Warren Buffett is Loading Up
Warren Buffett Interview (01/19/2009)
The Shortlist Just Got Shorter: Buffett Does What He Does Best
Read more on Warren Buffett, General Electric Company, Goldman Sachs Group at Wikinvest

Leave a Reply

-->