> Warren Buffett Blog: We made a good profit on Dow Chemical stock

Thursday, March 9, 2017

We made a good profit on Dow Chemical stock

We've never owned chemical shares. We own a specialty chemical company Ebersol a chemical common stock we own we bought the preferred stock of Dow because we wanted a preferred position and we held it. It was kind of interesting we bought that stock in July of 2008, the preferred and they were going to acquire, Dow was going to acquire Rohm & Haas and they needed money for it and then the world fell apart in the fall and Dow wanted to get out of the contract, they sued Rohm & Haas to get out of the contract but it was held that they had to stick with it. 

So we closed the deal to buy the preferred stock in April of 2009 by which time the market had totally disintegrated the time we closed that we bought $3 billion worth it probably wasn't worth tops more than 60 cents on the dollar so we showed up with $3 billion for something that was worth $1.8 billion at the time which is one reason why people offer us deals they know we will be around at the closing. We showed up for the Wrigley closing too that was on October 4 or something but during that whole period we had commitments and that kept me from doing some other things we might have done at that time. The fact that we had this $3 billion going out the door.

We ended up making about a billion dollars and plus we had an 8.5 percent coupon those years.