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It's hard to buy large numbers of shares in a short period while the price is low.
(I think this is a very big issue...the main reason for the structure of the BofA deal, in fact)



I agree this seems likely to be the case. It's much nicer to have $3 bn worth of shares secured at a known and reasonable price, rather than having to buy them on the market, slowly enough so that you don't influence the price, and if the price fluctuates, having to decide how far up to chase them, and with no assurance that you will get your desired quantity.

Given that this may be the case, and that Buffett may still be happy to buy $3 bn worth of GE at $22.25 towards the end of the year, what do you think he would do if the shares were trading at, say, $22, a week before expiry? If I were him, and if I wanted to acquire the shares at about that price, I would try to get the strike price negotiated down by a dollar, in exchange for the intrinsic value obtained. For instance, the warrants give Buffett the right to acquire 134.8 million shares at $22.25, total bill $3 billion. I can't see the GE board refusing to put the strike price at $21.25, in exchange for $135 mn cash, a week before expiry. Or is there another way of accomplishing the same thing?

Regards, DTM
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