Goldman Sachs gets $5 billion from Warren Buffett

Warren Buffett’s Berkshire Hathaway Inc one of the best known investors is piling another $5 billion investment into Goldman Sachs Group Inc, which is a great boost for the US Wall Street bank.

Goldman Sachs share price rose 8.1 percent after the announcement, while Standard & Poor’s 500 futures increased 15 points. The US bank also announced that they will be selling $2.5 billion of common stock.

Goldman Sachs, who on Sunday was given the approval to become a bank holding company by the Federal Reserve, will now find it easier to get access to financing and are in a better position to buy another bank. Shares of Goldman Sachs fell by 50 percent amid the financial crisis that happened last week when investors questioned its business model.

Buffet who according to Forbes magazine is the second richest American said “Goldman Sachs is an exceptional institution, and carried on to say “It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.”

Both Goldman Sachs and Morgan Stanley both became bank holding companies on Sunday. Morgan Stanley sold 20 percent share of the company to Mitsubishi UFJ Financial Group Inc, Japan’s largest bank.

Read the full article at reuters