August 25, 2011
Buffett Investing $5 Billion In Bank Of America
Warren Buffett's Berkshire Hathaway announced it is investing $5 billion in Bank of America, sending the banking giant's shares soaring. Bank of America has struggled under the weight of toxic mortgages from its 2008 purchase of Countrywide Financial Corp.
Buffett said Thursday he had called CEO Brian Moynihan to ask about investing because he considered Bank of America to be a strong company with good leadership.
The bank has struggled under the weight of toxic mortgages from its 2008 purchase of Countrywide Financial Corp. In recent weeks, Moynihan has insisted the bank doesn't need to raise capital.
Moynihan says the company still has the capital and liquidity it needs. But he also said he realizes that an investment from Buffett represents a strong endorsement.
Bank of America Corp. was trading at $8.29, up $1.30, or 18 percent, shortly after the market opened.
