Report: Buffett Net Worth Increases $154 Million after Obama Administration BoA Deal

By Newsroom America Staff at 10 Feb 2012

(Newsroom America) -- Obama benefactor and billionaire investment guru Warren Buffett's overall net worth increased by about $154 million following the announcement of a mortgage settlement deal with Bank of America by the administration Friday, according to a published report.

President Obama and the Justice Department announced earlier they had reached a $25 billion foreclosure abuse settlement with the nation's five largest banks, BoA being one of them.

Buffett, the report said, saw the value of his shares in BoA increase by about $154 million following the announcement of the deal, which sent the bank's stock to new highs.

"Buffett invested $5 billion in Bank of America (BofA) on Aug. 25, 2011. As part of his investment deal, Buffett gained warrants that allow him to buy 700 million shares of Bank of America stock at a strike price of $7.14 a share," said the report by The Washington Free Beacon, an online news watchdog publication.

"However, on Dec. 19, 2011, it was reported that Buffett was $1.5 billion underwater on his stock warrants, with shares of BofA stock trading at $4.94. But on Thursday, after President Obama personally announced the details of the settlement, BofA stock closed at $8.13 a share. The stock opened Friday morning at $8.31 and reached as high as $8.35 a share," said the report.

That means if Buffett exercised his warrants Friday morning, he would have made a net profit of about $847 million, of which $154 million would have been related to the mortgage deal, the report said.

The BoA deal is not the first time Buffett, a longtime Obama contributor and supporter, has benefited from administration policy.

Reports last month said a railroad owned by Buffett's Berkshire Hathaway investment firm stood to benefit financially from a decision by the Obama administration to reject a major oil pipeline project that would have stretched 1,700 miles south from Canada to refineries in Texas.

The railroad, Burlington Northern Santa Fe LLC, is among U.S. and Canadian railroads that stand to gain from the U.S. State Department's rejection of the Keystone XL pipeline project.

© 2012 Newsroom America.

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