Goldman Raises $10B After Buffett's Buy-in

New stock offering nets twice as much as bank expected
By Kevin Spak,  Newser Staff
Posted Sep 24, 2008 11:01 AM CDT
Lloyd Blankfein, chairman and CEO of Goldman Sachs Group, addresses a conference at the World Economic Forum in Davos, Switzerland, in this Jan. 24, 2008 file photo.    (AP Photo/Peter Dejong, File)
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(Newser) – Where Warren Buffett goes, investors follow. Goldman’s new stock offering pulled in $5 billion this morning, twice the $2.5 billion the firm expected, as investors followed Buffett’s lead, Bloomberg reports. That extra money, combined with Buffett’s $5 billion investment, “should quickly end credit-market debate about the capitalization and liquidity position of Goldman Sachs,” said one analyst.

Even so, raising capital is a desperate move for a bank that was posting record profits a year ago. “We view this as expensive capital by just about any measure,” said one Merrill Lynch analyst of Buffett’s buy. But “at this point, you’re better safe than sorry,” another analyst said. “I think that’s the moral of Lehman.”