Bank of America Corp (BAC): The Most Surprising Thing About Berkshire Hathaway Inc. (BRK.B)’s Goldman Sachs Group, Inc. (GS) Move

A sign of things to come?
The big question that the Goldman deal leaves for Berkshire shareholders is whether Buffett will use a similar exit strategy in exercising the warrants Berkshire obtained in its 2011 deal with Bank of America Corp. (NYSE:BAC). The 700 million shares of Bank of America Corp. that Berkshire could receive if it exercises all of its warrants would represent an equally impressive 6% stake in the bank, and Bank of America Corp. might have the same concerns about potential dilution that reportedly motivated Goldman to make its modification. Given that those warrants don’t expire until 2021, Bank of America Corp. (NYSE:BAC) will have plenty of time to think about how it wants to approach Berkshire when the time comes.

Even after the modification, Berkshire Hathaway Inc. (NYSE:BRK.B)’s stake in Goldman Sachs Group, Inc. (NYSE:GS) will still be significant, at roughly 2%. But with its cash stash untapped, Berkshire still has its elephant gun loaded for potential prey beyond the financial sector.

The article The Most Surprising Thing About Berkshire’s Goldman Move originally appeared on Fool.com.

Fool contributor Dan Caplinger owns shares of Berkshire Hathaway and warrants on Bank of America and Wells Fargo. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends American Express, Berkshire Hathaway, Coca-Cola, Goldman Sachs, and Wells Fargo. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, and Wells Fargo.

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