Interest Rate Roundup

Wednesday, October 01, 2008

GE announcing huge stock offering; Buffett to participate

General Electric has announced it will sell at least $12 billion of common stock in a public offering. GE wants to price it before tomorrow's market open. It is also selling $3 billion of perpetual preferred shares to Berkshire Hathaway, Warren Buffett's investment vehicle. The shares will yield 10% and be callable three years down the road at a 10% premium. Berkshire also gets warrants to buy $3 billion worth of common shares at $22.25 any time over the next five years.

2 Comments:

  • I don't about the timing of these but the Goldman deal seemed fishy timing wise. I read he had 40 billion in puts he had written there thus salvaging them from the gutter by buying in.

    By Anonymous Anonymous, at October 1, 2008 at 5:08 PM  

  • Unfortunately, the probability of GE stock reaching (and staying) much lower than $22.25 over the next 5 years is quite high. If that happens, then those warrants won't mean much.

    By Blogger Shankar, at October 2, 2008 at 2:12 AM  

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