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Warren Buffett's GE Payout Dwarfed by Goldman Goldmine

Warren Buffett's Berkshire Hathaway and General Electric have quietly agreed to modify their almost 5-year-old warrant deal.

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Back in October 2008, at the height of the credit crisis, Berkshire gave GE a massive vote of confidence with a $3 billion investment. As part of the deal, Berkshire got five-year warrants giving it the right to buy almost 135 million shares of GE stock at $22.25 each. That would be a $3 billion purchase.

As The Wall Street Journal's Deal Journal blog points out, GE's annual 10-K filing last month includes a paragraph tucked away on page 152 revealing that GE and Berkshire agreed in January to a "net share settlement" of the warrants.

When they expire this October, GE will give Berkshire stock that's worth as much as Berkshire would have realized by exercising the warrants and then immediately selling the stock it had just bought.

That's the same modification that Goldman Sachs announced Tuesday for the warrants it gave Berkshire for its own credit-crisis cash infusion. (Goldman issued a news release to call attention to the deal.)

(Read more: Buffett Shows His Love for Goldman)

The GE warrant deal, however, won't be nearly as profitable as Goldman's.

While Goldman shares are trading well above the price at which Berkshire could buy shares using the warrants, GE's stock is now around $23, just slightly above the warrants' strike price of $22.25.

If the deal were executed now, then Berkshire would get just over $100 million worth of GE stock, far less than the $1.4 billion of Goldman stock that Buffett's company would receive at today's prices.

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Berkshire still has Bank of America warrants that could turn out to be even more profitable than the Goldman payout. As part of its $5 billion loan to BofA in 2011, Berkshire got the right to buy 700 million shares for $7.14 each.

BofA is currently trading around $12, giving Berkshire a "paper profit" of $3.5 billion if the warrants were exercised now.

Don't look for a similar "net share settlement" of those BofA warrants anytime soon. They don't expire until 2021.