Buffett Buys $3 Billion in Preferred Stock in GE, Expects U.S. Bailout to Pass
As markets anxiously await news of the bailout plan, Warren Buffett's Berkshire Hathaway announced that it will be buying $3 billion in General Electric preferred stock deal.
GE's announcement Wednesday involves preferred stock that carries a dividend of 10%. The deal is similar to the $5 billion stake in Goldman Sachs.
"I have been a friend and admirer of GE and its leaders for decades. They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come," Buffett announced in a press release.
In an interview on CNBC following the announcement, Buffett said that he expects Congress to pass the bailout plan. Buffett noted that this is a rescue plan for the U.S. economy, not Wall Street.
When asked whether he could invest in the plan, Buffet replied that if the U.S. Treasury offered him a 1% stake in it, he would take the deal.
By Steve Stecyk and edited by Nancy Girgis
©CEP News Ltd. 2008