Buffett bails out Bank of America

Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) has purchased $5 billion of Bank of America (BAC) preferred shares, which supplies apparently much-needed capital to the firm. Berkshire Hathaway will receive a 6% dividend on its new shares, plus a warrant to purchase common shares.

Some smart initial commentary on the move from: Avi Saltzman (Barron’s), Josh Brown (Reformed Broker) and Henry Blodget (Business Insider).

Covestor models that hold BAC as of end of day 8/24/11 – click through for details on performance and other holdings:

Large Cap Value
Discount to Intrinsic Value
S&P 500 Best of Breed
Financial Services
Core Price Volatility Volume
Flexible Value
Top 5 Screener
Value and Growth 2
Core Holding

And those that hold BRK.B shares as of end of day 8/24:

Suncoast Equity
Long Term Value
Dividend Value
Fortune’s Most Admired Companies


Company press release, 8/25/11

“Bank of America: Buffett Buying $5 Billion in Preferred Stock; Shares Soar” 8/25/11 Barrons.com,  http://blogs.barrons.com/stockstowatchtoday/2011/08/25/bank-of-america-buffett-buying-5-billion-in-preferred-stock-shares-soar/?mod=BOLBlog

“WARREN BUFFETT SAVES BANK OF AMERICA: Oracle Injects $5 Billion Of Capital Bank Swore It Didn’t Need ” Henry Blodget, Business Insider, 8/25/11  https://www.businessinsider.com/warren-buffett-saves-bank-of-america-2011-8