Buffett endorsement bolsters BoA Merrill shares

Bank of America Merrill Lynch shares bucked losses on Friday after Warren Buffett struck a deal to invest in $5 billion worth of preferred stock with warrants to buy 700 million BoA Merrill shares at $7.14 a share.

“I remain confident that we have the capital and liquidity we need to run our business,” said BoA Merrill chief executive officer Brian Moynihan, while announcing the investment. The reference to BoA Merrill being well-capitalised is a mantra Moynihan has chanted often this year. “At the same time, I also recognise that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”