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BofA shares soar after Buffett invests $5 billion

Berkshire Hathaway steps in to help ailing Bank of America

Topics: U.S. Economy,

BofA shares soar after Buffett invests $5 billionFILE - In this July 13, 2010 file photo, Bank of America's headquarters are shown in Charlotte, N.C. Bank of America Corp. is cutting 3,500 employees this quarter and working on restructuring plans that will ax several thousand more jobs, The Wall Street Journal and The New York Times reported citing people familiar with the situation. (AP Photo/Chuck Burton, File)(Credit: AP)

Warren Buffett’s Berkshire Hathaway is investing $5 billion in Bank of America, sending its shares soaring by 24 percent.

Buffett said Thursday he had called Moynihan to ask about investing because he considered Bank of America to be a strong company with good leadership.

The bank has struggled under the weight of toxic mortgages from its 2008 purchase of Countrywide Financial Corp. In recent weeks, CEO Brian Moynihan has insisted the bank doesn’t need to raise capital.

Moynihan says the company still has the capital and liquidity it needs. But he also said he realizes that an investment from Buffett represents a strong endorsement.

Bank of America Corp. is up $1.69 to $8.68 at the opening bell.

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