Don't Forget Buffett's Mini-Payday, Courtesy of General Electrichttp://www.fool.com/investing/general/2013/10/23/dont-forget-buffetts-mini-payday-courtesy-of-gener.aspx Steve Symington
October 23, 2013
If you told Warren Buffett -- one of the richest men in the world -- that the best things in life are free, he'd probably agree with you.
After all, a recent SEC filing shows Buffett's Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) welcomed 10.7 million free shares of General Electric (NYSE: GE) into its coffers last Thursday, a bounty worth around $264 million based on last Wednesday's closing price of $24.68 per share.
Then again, though Berkshire didn't have to part with any cash for its new position, I suppose it wasn't entirely free. Remember, GE delivered the shares as part of Buffett's $3 billion preferred-share injection into the struggling conglomerate way back in 2008, when the company was essentially being crushed by the weight of its own soaring debt. To be sure, that move certainly required Buffett to assume at least some risk to prop up the century-old engineering titan.
However, you can also be sure Buffett didn't take this bet lightly, and anyone familiar with his investing savvy knows he was probably all too aware his chances of success were overwhelming. Remember, we're talking about a guy who once stated with regard to selecting his investments: "I like to shoot fish in a barrel. But I like to do it after the water has run out."
In any case, while GE has since repurchased those lucrative preferred shares, the agreement also included warrants for Berkshire to purch