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Warren Buffett's Burlington Northern Stake Tops 17% as Berkshire Hathaway Exercises Options

Warren Buffett's bet on the rails just got bigger.

In the latest in a series of filings with the SEC late this afternoon, Buffett's Berkshire Hathaway holding company reveals that on Wednesday it exercised call options to puchase 7,847,818 shares of the freight railroad Burlington Northern Santa Fe.

The purchase raises Berkshire's stake to 60,828,818 shares, or 17.2% of Burlington Northern's outstanding shares.

Berkshire bought the bulk of the options in late August. It paid roughly $38 to $40 for each option, which gave it the right to buy shares for $40 each on October 3. The total cost of each share, ($38-$40 for the option plus $40 to buy the stock), meant Berkshire had effectively made sure it could buy Burlington Northern shares a month later for roughly the same price ($80) it was paying for other Burlington stock purchases in late August.

Since then, the shares have gained almost 9%, with the bulk of the gain generated by an advance of $4.49 (5.8%) today, bringing the stock to $86.78. Current price:

Is Buffett's next stop a 25% stake or more?

Questions? Comments? Email me at buffettwatch@cnbc.com