Warren Buffett boosted stock prices and confidence when he invested $5 billion in Bank of America.
The bank’s stock shares jumped more than 9 percent to $7.65 on Thursday after soaring 25 percent in early trading. This was a change from the usual grim drop in the stock, which is still down 43 percent for the year.
Buffet is one of the leading economic experts, so his confidence lends ethos to the bank itself, and encourages people to reinvest.
“Having Warren Buffett join the Bank of America ship is like having a whole squadron of Navy SEALs supporting you,” said Charlotte businessman C.D. Spangler, one of the bank’s largest individual shareholders, the Charlotte Observer reports.
Buffet has bailed out other businesses such as Goldman Sachs and General Electric.
“Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it,” Buffett said in a statement. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them.”
The banking genius came up with the idea in the bathtub, he told CNBC.