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Goldman Sachs Gets the Warren Buffett Boost

Goldman Sachs(GS Quote) is pricing a public offering of 40.65 million common shares at $123 per share, for total gross proceeds of approximately $5 billion.

This offering comes on the heels of the recently-announced $5 billion strategic investment by Berkshire Hathaway(BRKA Quote) in the form of perpetual preferred stock, and brings the recent total amount of capital raised by Goldman Sachs to $10 billion.

Warren Buffett's company will also receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, which are exercisable at any time for a five year term.

The investment from Mr. Buffett comes at a great time for Goldman Sachs, as the company enters a new era as a bank holding company. Because the investment from Mr. Buffett is for preferred shares, we are not as excited as we would have been had he taken a chunk of common shares. We will be watching GS closely, as the proposed federal bailout plan could be a catalyst to move the shares in either direction. The company has a 1.12% dividend yield, based on last night's closing stock price of $125.05. For now, investors may want to see how things unfold with the bailout plan before making any large bets.

Goldman Sachs is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.