He bought $5 billion in preferred shares. The warrants were attached to those preferred shares, but it is the preferred shares that have the regular interest/dividend payment, not the warrants.
Once again, it is NOT the warrants that are earning him money, it is the preferred shares. The warrants have no dividend or interest attached to them, only the ability to buy shares at a given price. Check your facts.
" The warrants themselves do not earn him any money unless he either uses them to buy common shares or he sells the warrants."
Actually your above statement is incorrect. His warren ts are earning him and costing BAC 5% yearly AND BAC can buy those warrants back at a cost of 6%. And he has ten years to buy BAC for 7.14 or NOT.
Nice try, but Buffett "loaned" the money to BAC through preferred shares, not warrants. The money he is earning is from the preferred shares, not warrants. The warrants were an extra sweetener to the deal that gives him the ability to buy common shares for $7.14 at any time. The warrants themselves do not earn him any money unless he either uses them to buy common shares or he sells the warrants.
Warren Buffett has yet to buy one single share of BAC. He loaned BAC money via warrants that pay him 300 million per year.So the 2nd largest bank in the USA is borrowing money from WB. How pathetic ! Even more pathetic is that he now has the right to by 800 million shares for $7 a share. However he does not have to bay shares at all AND he has ten years to decide if he wants those share at all. What a sweet deal for him and a sour deal for those owning common shares. This stock is very crowded here at $8 and better to take your 60% gains before they are lost.