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Anyone want to look into trading in Goldman Sachs[GS
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] at the close yesterday? Goldman goes from $120 to $125 in the last 5 minutes of trading yesterday, while the broader market was dropping. Anything happen with Goldman after the close? Anyone?
It's up 4 percent pre-open, by the way.
In addition to buying $5 billion of preferred stock, Berkshire Hathaway [BRK
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]will also receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, exercisable at any time for a five year term.
Goldman is also raising at least $2.5 bln in common equity in a public offering, though Mr. Buffett says that will be raised to $ 5 billion.
Buffett's involvement is a big positive, but it IS dilutive (just the warrants, at 43 million shares, would be 10 percent dilutive), and the capital raising is not coming at a cheap price.
This comes on talk in Japanese newspapers that Sumitomo Mutsui Financial may also invest in Goldman.
Elsewhere:
1) Buffett, on our air, specifically said he would not be buying into Goldman if he thought the Treasury bill being considered in Congress was not going to pass. We will have another day watching Mr. Paulson get the stuffing beat out of him.
Some traders are now openly speculating that if a bill cannot be passed in the form Treasury wants it, they may do it in pieces. This is not a desirable outcome.
2) Mortgage rates went up, the 30-year fixed rate mortgage rose to 6.08 percent, from 5.8 percent last week. Applications to purchase homes dropped 10 percent.
3) Lowe's [LOW
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]reiterated its 2008 guidance and repeated they were on track to double their earnings in the next five years.
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Berkshire Hathaway [BRK
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Goldman Sachs [GS
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