Pat Dollard

Tweet

Hmmmm…GE, Iran, GE, Iran, GE, Iran…

…Warren Buffett…

Hmmm…

General Electric received a vote of confidence Wednesday afternoon from billionaire investor Warren Buffett, who made a $3 billion investment in the corporate conglomerate.

On top of a newly announced $12 billion common stock offering, GE (GE: 24.50, -1.00, -3.92%) said it has sold $3 billion in perpetual preferred stock to Berkshire Hathaway, Buffett’s holding company.

GE also backed its 2008 earnings guidance provided a week ago and said it is on track for third-quarter financial-services earnings of approximately $2 billion.

“GE is the symbol of American business to the world. I have been a friend and admirer of GE and its leaders for decades. They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come,” Buffett said in a statement.

Buffett’s perpetual preferred stock has a 10% dividend that is callable after three years at a 10% premium. Berkshire Hathaway also receives warrants for $3 billion in common stock at a $22.25 per share strike price.

Shares of GE erased double-digit percentage losses once trading was resumed Wednesday afternoon.

GE has been under intense pressure on fears the ongoing credit crisis will weigh heavily on GE Money, the financial business the company receives half of its revenue from.

“This action does two things for GE investors. First, it enhances our flexibility and allows us to execute on our liquidity plan even faster. Second, it gives us the opportunity to play offense in this market should conditions allow,” GE CEO Jeff Immelt said in a press release.

Here’s an interview with Buffett’s authorized Biographer:

(Fox)