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Brian Moynihan (BAC), you just got "fleeced" by Warren Buffett, Doug Kass asserts. Kass figures...

  • Thursday, August 25, 2011, 3:55 PM ET
    Brian Moynihan (BAC), you just got "fleeced" by Warren Buffett, Doug Kass asserts. Kass figures the current value of the warrants, taken over 10 years, provides an extra 4.5%/year return on top of the 6% dividend on the preferred shares, for a total cost of capital to BofA of nearly 10.5%/year. If the bank really didn’t need the capital infusion, was it worth it?
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This news story has 4 comments:

  •  
    They needed the money and the PR
    25 Aug 2011, 04:04 PM Reply Like
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    Sounds like the predatory fixed rate loans that caused the housing crisis! 5 billion now for 10 billion? Steep. Steal for buffet in the long term if BOA remains solvent in the near-mid term.
    25 Aug 2011, 04:05 PM Reply Like
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    He doesn't factor in the capital infusion from the warrants? Plus you can't put a price on investor confidence... unless it's the $6.5B in market cap BAC got back today
    25 Aug 2011, 04:17 PM Reply Like
  •  
    "Sounds like the predatory fixed rate loans that caused the housing crisis! 5 billion now for 10 billion? Steep. Steal for buffet in the long term if BOA remains solvent in the near-mid term."

    That's a really good point. If I were a bac shareholder I'd definitely want some people on the board to leave asap along with the ceo.
    28 Aug 2011, 06:05 PM Reply Like
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