Goldman Sachs Raises $5 Billion After Buffet Makes Bid

[Dover]

Source: Times Online

Goldman Sachs sold double the amount of stock it planned to sell in a public offering this morning as market confidence in the US investment bank grew, following a cash injection from Warren Buffett.

The American bank sold 40.65 million of shares at $123 each, raising $5 billion (£2.7 billion), twice the size of the public offering it announced yesterday. It said today that it has an option to sell an additional 6.1 million shares to handle the excess demand.

The shares were trading at $128.56, up $3.51, during the New York morning session.

Lloyd Blankfein, chief executive of Goldman Sachs, last night said he planned to raise up to $12.5 billion (£6.74 billion) of new funds by selling a stake to Mr Buffett and tapping other institutional shareholders.

The surprise move by Mr Buffett, which was welcomed by some but was described as “worrying” by traders in Hong Kong and Tokyo, is understood to have derailed a big stakebuilding exercise by Sumitomo Mitsui Financial Group, the Japanese megabank.

The Japanese group was planning to invest around $2.5 billion in Goldman and would have become the third Tokyo giant to swoop on Wall Street within 48 hours. In a flurry of deals that have seen Japan’s biggest financial houses burst out of their usual mode of conservatism, Nomura has clinched the European and Asian operations of Lehman Brothers, while Mitsubishi UFJ is hoping to secure a major stake in Morgan Stanley and a seat on its board...cont'd

Read more: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4816023.ece

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Warren Buffett stake in Goldman Sachs earns $783 million return

Within hours of revealing his dramatic, confidence-boosting investment in Goldman Sachs yesterday, Warren Buffett had made a $783 million (£424 million) notional profit.

The Wall Street investment bank astounded its rivals by raising $10 billion in fresh capital — $5 billion from Berkshire Hathaway, Mr Buffett’s main listed company, and $5 billion through a public share offering. Shares in Goldman rose 6 per cent to $133.00, giving Berkshire an instant theoretical profit on a side deal, under which it has warrants to buy up to $5 billion of new Goldman shares at $115 a share at any time in the next five years...>

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4821506.ece

[Lucky Luciano]

1. Good play for GS...

Now, they may have enough capital so that they will not require any help from the treasury. If that is the case, the executives will be able to continue to be compensated well.

[Not the Only One]

2. We’ve had Warren Buffett on the phone tonight, other experts that we’ve been consulting,”

That's Kent Conrad talking about the bailout bill agreement that's been reached between congressional negotiators and the WH. Warren Buffet invests $5B in GS, then comes out for the bailout and then helps write the bailout bill, thus guaranteeing that his $5B investment shoots to the moon in value, courtesy of the American worker.

http://www.fool.com/investing/dividends-income/2008/09/26/why-would-warren-buffett-stoop-so-low.aspx">Why Would Warren Buffett Stoop So Low?

[mbperrin]

3. BBBBBBut NO MONEY is available from the private sector -

we've GOT to have the government bailout or my ATM won't work Monday, I'll be laid off Monday, and all the grocery shelves in America will be empty!

Didn't anyone hear that there's NO CREDIT and NO LIQUIDITY of any sort whatsoever without the bailout?

This story is an obvious fraud - I KNOW the President and my Congressfolks would not mislead me!!!!!!!!




If I need the sarcasm tag here, check your IQ.