Billionaire Warren Buffett back to being the savior for American companies. This time he announced plans to invest U.S. $ 5 billion for Bank of America (BoA). The move was made BofA shares soared 9 percent.Legendary investor says he is ready to lend a hand to the CEO of BofA BofA Brian Moynihan because it considers a strong bank. But lately the market has given a different assessment. As
recently, Bank of America shares have dropped 50 percent from a year
ago amid fears of mortgage problems and concerns that the bank had to
sell some shares to shore up balance sheets. This sale is considered a big challenge for banks and Moynihan, who has led since January 2010.
While Buffett's investment of U.S. $ 5 billion as a drop in the bucket in the biggest U.S. bank with assets of U.S. $ 2.2 trillion. Investment is considered as a valuable symbol of confidence in the future. This eliminates the investment management credibility gap with investors, "said Jonathan Finger, Finger Interests Ltd partners owner 1.1 million shares." It's time to show that they have plans to grow the business, "he said.BofA spokesman Jerry Dubrowski said Bank of America had cash securities worth U.S. $ 402 billion in the second quarter. Cash is the highest level in history. Most of the problems banks are from 2008 is the largest mortgage lending.
Banks should also lose U.S. $ 15.3 billion in the last four quarters. Revenue fell 34 percent in the first half of 2011 compared to same period last year menjaadi U.S. $ 40 billion after regulators checking accounts and credit cards.
Help Others
Buffet has ever injected U.S. $ 5 billion to Goldman Sachs Group Inv at the height of the financial crisis of 2008 and help reverse the crisis of confidence in banks and the U.S. banking system in general.
At the same time, he also invested U.S. $ 3 billion for General Electric, the iconic American company founded bulb inventor Thomas Edison. The company's shares rose sharply after the Buffett investment. In late 2008, before the Buffett investing in Goldman Sachs, the bank's shares fell nearly 50 percent from its peak of U.S. $ 247.92. Stocks immediately surged 5 percent after it was announced.
For investments in BofA, Buffett has made a profit on paper of U.S. $ 357 million. Having closed at U.S. $ 6.99 U.S. on Wednesday, the stock went up 66 cents or 9.4 percent to U.S. $ 7.65.
