One interesting twist to this story involves whether Berkshire has better ideas for the $5 billion it would have used to acquire the shares through the warrants. If Goldman shares trade near current levels ($146) prior to October 1, Berkshire should receive around 9.3 million shares without laying out any cash for the shares. If Buffett still wants to commit $5 billion to Goldman, he could theoretically do so over a period of time and end up with around the same economic ownership he is entitled to purchase under the terms of the warrant ... but I guess the question is why not simply exercise the warrant for $5 billion if he wants the greater ownership? Does anyone know if there are tax advantages involved in rolling the warrants into shares based on this new agreement and then establishing a higher cost basis for any additional shares Berkshire wishes to purchase?
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