CNBC's Becky Quick Exclusive Report on Investor Warren Buffett's reaction to the government plan and what it's done to trading shares of Buffett's company Berkshire Hathaway.
Below is unofficial transcript of Becky Quick's report tonight on CNBC's live special at 8 PM "Wall Street Crisis: Is Your Money Safe?"
All references must be sourced to CNBC.
CNBC's Becky Quick (co-anchor of CNBC's "Squawk Box"): FAMED INVESTOR WARREN BUFFETT TELLS ME EXCLUSIVELY HE SUPPORTS THIS PLAN WHOLEHEARTEDLY... EVEN THOUGH SOURCES TELL ME THE PLAN HAS ALREADY WREAKED HAVOC ON TRADING IN SHARES OF BERKSHIRE HATHAWAY, HIS COMPANY.
AS FOR THE PLAN -- BUFFETT APPLAUDS SECRETARY TREASURY HANK PAULSON AND FEDERAL RESERVE CHAIRMAN BEN BERNANKE FOR PUTTING IT TOGETHER SO QUICKLY. IN FACT BUFFETT SAYS: "IT'S WHAT I WOULD DO IF I WERE THERE."
SO HOW IS BUFFETT AN EARLY VICTIM?
LET'S GO BACK TO FRIDAY'S TRADING, TICK-BY-TICK.
AT THE CLOSE OF TRADING FRIDAY, BERKSHIRE CLASS A SHARES SKYROCKET BY OVER $9,000 TO $147,000 A SHARE.
TROUBLE IS, PEOPLE CLOSE TO THE MATTER SAY THESE LAST MINUTE TRADES WERE A DISCONTINUITY AT BEST ..... AND A MANIPULATION AT WORST. THE STOCK PLUMMETS IN AFTER HOURS TRADING.
BERKSHIRE IS ONE OF THE 799 FINANCIALS ON THE S.E.C.'S LIST OF COMPANIES THAT CAN'T BE SHORTED FOR THIS 10-DAY PERIOD. BUT LATE IN THE DAY FRIDAY, THE S-E-C MAKES AN EXCEPTION TO THE RULE ALLOWING SPECIALISTS ON THE FLOOR TO SHORT THOSE STOCKS. AND THAT SEEMS TO BE WHERE THE TROUBLE COMES IN.
BERKSHIRE SHARES ARE HOVERING AT ABOUT 133,000 A SHARE FRIDAY. RIGHT BEFORE THE CLOSE, A SALE OF 50 SHARES AT 138,000 EACH IS FOLLOWED IMMEDIATELY BY A TRADE OF 342 SHARES OF BERSHIRE AT 147,000 DOLLARS APIECE.
AFTER THE CLOSE, BERKSHIRE SHARESTRADE BACK DOWN AT AROUND 138,000 DOLLARS A SHARE. THE SPECIALISTS -- THE ONLY ONES EXEMPT FROM THE NO-SHORT RULE -- ARE THE ONES WHO WOULD BENEFIT FROM THIS DISCONTINUITY. THE SPECIALIST COULD MAKE A PROFIT BY SHORTING THE STOCK HERE ... AND THE BUYER IN THAT OVERPRICED TRADE LOSES OUT. YOU CAN BET THAT A LOT OF PEOPLE WILL BE LOOKING INTO THIS ON MONDAY.
BY THE WAY JIM MCGUIRE OF LABRANCHE IS THE LONG-TIME SPECIALIST FOR BERKSHIRE. BUT IT TURNS OUT HE LEFT EARLY ON FRIDAY -- AT 3 PM FOR A DOCTOR'S APPOINTMENT. SO HE WASN'T THERE WHEN THESE TRADES GO THROUGH.
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