Skip to main content

Updated from Sept. 23

Goldman Sachs


on Wednesday priced a $5 billion public offering, doubling the amount of common shares it said it would sell the night before.

The firm plans to sell 40.65 million common shares at $123 per share. The firm had said Tuesday evening, in announcing an investment of up to $10 billion by Warren Buffett's

Berkshire Hathaway


, that it would raise at least $2.5 billion through a public equity offering.

Goldman has the option to issue an additional 6.1 million common shares if there is enough demand.

The capital-raising plan comes after the New York financial-services firm that just days ago adopted a plan to switch from an investment bank to a bank holding company.

Goldman shares

rose 1.3% to $126.73 in recent trading Wednesday, but the stock had been much higher just after the announcement was made.

Goldman said Tuesday it will sell $5 billion of perpetual preferred stock to Berkshire in a private offering. The preferred stock has a dividend of 10% and is callable at any time at a 10% premium. In connection with the offering, Berkshire will also receive warrants to buy $5 billion of common stock with a strike price of $115 a share, exercisable at any time for five years.

"We are pleased that given our longstanding relationship, Warren Buffett, arguably the world's most admired and successful investor, has decided to make such a significant investment in Goldman Sachs. We view it as a strong validation of our client franchise and future prospects," said Goldman Chairman and CEO Lloyd Blankfein in a press release. "This investment will further bolster our strong capitalization and liquidity position."

Buffett said Goldman "has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."

Separately, Buffett said during an interview on


Wednesday morning that the recent chaos in the market is essentially "an economic Pearl Harbor." He also said the government's $700 billion


plan was needed, though he believes Treasury Secretary Henry Paulson would have rather found another solution to the financial crisis.

This article was written by a staff member of