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Get Ready for Berkshire's Goldman Sachs Investment

NEW YORK (TheStreet) -- Berkshire Hathaway (BRK.B) left Wall Street hanging a bit on Thursday after asking the Securities and Exchange Commission to allow it to omit some confidential information from a quarterly disclosure on the firm's stock holdings.

The omission of confidential information could drum up speculation of whether Berkshire and its head Warren Buffett are on the verge of building a new large investment to complement the firm's $10 billion-plus stakes in Wells Fargo (WFC), Coca-Cola (KO), American Express (AXP) and IBM (IBM).

"Confidential information has been omitted from the public Form 13F report and filed separately with the Commission," Berkshire said in its 13F filing with the SEC on Thursday.

Last time Berkshire requested confidentiality in its quarterly disclosure of the firm's stock holdings it was in the process of amassing a leading stake in IBM.

For now, investors trying to track the movements of the "Oracle of Omaha" are left to speculate on comments Buffett recently made about the health of the banking industry and U.S. economy. They are also left with the knowledge that Berkshire will inevitably build a significant position in investment bank Goldman Sachs (GS) this Fall.

Earlier in 2013, Berkshire reached a deal with Goldman Sachs to convert a profit on a large warrant contract for the firm's shares into a common stock investment.

Buffett made preferred investments in the likes of Goldman and General Electric (GE) during the financial crisis and with Bank of America (BAC) in 2011. The legendary investor also received attractively-priced warrant contracts for each of the respective firm's shares when making its preferred stock investments.

"Berkshire is the 1-800 number when there is panic in markets and people need capital," Buffett said at the firm's May shareholder meeting. The conversion of Goldman Sachs warrants will make the investment bank Berkshire's first Wall Street common stock holding in over a decade.

The deal will give Berkshire an equal value in shares to the difference between the price of the Goldman's stock in the 10 trading days preceding Oct. 1 2013, and a previously agreed exercise price of $115, without the investment conglomerate putting up any cash.

As of Wednesday's close, Berkshire will roll its profit on a previously agreed 43,478,260 warrant contract into a stock holding of nearly $2 billion, or over 2.5% of the Goldman's outstanding shares.

While Berkshire's conversion of the profit on its Goldman Sachs warrants is a matter of arithmetic, it also raises the prospect that the investment bank becomes a focus of increased media and investor attention. Meanwhile, it is unclear whether Buffett will amass a position in Goldman shares beyond the warrant conversion.

"We intend to hold a significant investment in Goldman Sachs, a firm that I did my first transaction with more than 50 years ago," Buffett said in a March 23 press release announcing amended terms to the warrant.

Buffett's Goldman Sachs warrant also is relevant to Bank of America, given Berkshire's ability to buy up to 700,000,000 shares in the lender at a price of $7.14 a share. Berkshire is up about $5 billion on the warrant at current prices, indicating the company might eventually take a large stake in Bank of America shares.

Regardless of what Berkshire omitted from the public Form 13F on Thursday, Goldman Sachs will become a part of the firm's portfolio in a matter of months.

Berkshire Hathaway did not immediately respond to emails seeking comment.

Bloomberg first reported on Berkshire's omission of confidential information on Thursday.

In 13F disclosures, Berkshire did report it continues to increase its leading holding in Wells Fargo, the top U.S. mortgage lender. Berkshire now owns nearly $20 billion of the company's outstanding shares.

The investment conglomerate also added significantly to a recently opened position in General Motors (GM) shares. In the second quarter Berkshire also initiated a sizeable holding in Suncor (SU) shares, while opening a relatively small position in the shares of Dish Network (DISH).

-- Written by Antoine Gara in New York

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