Buffett Strikes Gold: No Cash For $1.5B In Goldman Stock

The deal taxpayers should have negotiated with TARP.

Uncle Warren's 2008 investment in Goldman Sachs pays off handsomely.  More proof that Geithner, Paulson, Kashkari and the entire team at Treasury and the New York Fed were blatantly poor negotiators.  But lest we forget, that was the plan all along.

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How the Oracle of Omaha turned an 18% rise in Goldman's shares into a 64% return for Berkshire Hathaway shareholders

FORTUNE -- We knew Goldman Sachs was wounded in the financial crisis. It may have been in more trouble than is understood.

That's the sense you get from Warren Buffett's recently inked deal to turn the warrants Berkshire Hathaway received as part of its $5 billion investment in Goldman at the height of the financial crisis into stock. Do the math on the deal, and it becomes clear just how much Goldman's executives were willing to pay for cash at the time. Or maybe this is just the magic of Buffett. Or maybe it's both.

On Tuesday, as part of an amendment to its earlier deal, Goldman said it would hand $1.4 billion worth of shares to Berkshire.  Buffet's company doesn't have to pay a penny for the shares. And this is after Goldman has already paid Buffett back for his financial crisis era investment in full, plus interest. Nice work if you can get it.

Comments

[Howard T. Lewis III]

I am inspired by this vision to suspect Buffet has found the road to muscling in on the queen lizard's action. Buffet's overhead is probably quite spartan compared to world-wide luxuries and other amenities for queen liz. We may have a new contender. Bill Gates fell in line behind the NWO. Buffet is his own realm of greed, with concessions to avoid direct bad feeling from his competition. The Walmart crowd radiate here today, gone tomorrow. It looks like it will take a century for them to peter out, however.