Warren Buffett Extends Buying Spree To GE

On Monday, Warren Buffett took a stake in a Chinese electric car company. On Wednesday, the billionaire’s Berkshire Hathaway made the ultimate electric play, buying $3 billion of General Electric preferred stock. The deal, which also includes $3 billion in warrants for GE common, caps a flurry of investing by Buffett-owned entities amidst the recent market turmoil. (LA Times)

Buffett’s GE warrants carry a strike price of $22.25, a substantial discount to the 52-week high of $42.15 that GE hit last November. Buffett will earn a 10% dividend yield on the GE preferred, exactly the same yield he is getting on the $5 billion he put into Goldman Sachs Group last week, though there are more strings attached to the GE deal.

Sources:

• GE to raise $15B to boost capital, including $3B from Warren Buffett (Los Angeles Times)
• Warren Buffett On The Economy (Charlie Rose) (video)
• Why Buffett Will Make Out Like a Bandit in This Market Crisis (USNews & World Report)
• GE Asks For, Gets Oracle’s Blessing (Barron’s)
• Does Warren Buffett Think Goldman Is More Creditworthy Than GE? (Seeking Alpha)
• BYD soars as Buffett bets on its electric cars (The Standard, Hong Kong)
• Buffett’s Golden Goldman Buy ( Forbes.com)
• Why Constellation Chose Warren Buffett Over $35 a Share (Wall Street Journal Deal Blog)

Recommended:

• Portfolio review of new Buffett biography, The Snowball