Buffett said he conjured the idea while in the bathtub
Rubber Duckie, you're so fine
And I'm lucky that you're mine
ABC News Money
By: Susanna Kim
August 25, 2011
Berkshire Hathaway, led by billionaire Warren Buffet, announced it will buy $5 billion worth of Bank of America shares in a private offering. BofA stock soared though U.S. stock markets were down Thursday morning on yet another gloomy unemployment claims report.
Buffett said he conjured the idea while in the bathtub on Tuesday. He called Brian Moynihan, chief executive officer of Bank of America, on Wednesday, he told CNBC.
Stock of Bank of America, the largest bank in the U.S., rose over 20 percent after the market's open but came down slightly later in the morning. At 10:40 AM eastern time, the stock was up 17 percent to $8.18 a share. The Dow Jones industrial average fell 129 points to 11,193.
Jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, the Labor Department reported today. Part of the rise was due to new applications from Verizon, where workers had been striking over a contract deal.
Bank of America stock had plunged 47 percent for the year, as embattled CEO Moynihan has tried to manage its pile of bad mortgages and its exposure to the European debt crisis.
But Warren Buffett praised Monyihan and the bank in a statement.
"Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it," Berkshire Hathaway chairman and chief executive officer Warren Buffett said in a press release. "I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them. Bank of America is focused on their customers and on serving them well. That's what customers want, and that's the company's strategy." Read more about the rubber duckie investment