Buffett negotiated a favorable deal to buy Bank of America stock, and tripled his investment.
On his 87th birthday, Warren Buffett is set to rake in $11.6 billion in profits on his Bank of America trade.
Buffett invested $5 billion in Bank of America in 2011 as the company trying to leave behind the financial crisis under the leadership of its new CEO, Brian Moynihan.
Buffett negotiated a favorable deal with the bank, which was seen as a public vote of confidence in the company's future. His $5 billion investment in preferred shares came with the option to convert those to common stock shares by 2021. The preferred shares paid $300 million annually in dividends.
After passing a stress test in June, Bank of America's plan to pass along its wealth to its shareholders in the form of dividends and stock buybacks was approved. That prompted Buffett to convert his stake to common shares. BofA increased its dividend payment to 12 cents a share, which will return $336 million a year to Buffett after converting his shares to common stock, according to data from Bloomberg.
Buffett's common shares are currently worth about $16.61 billion. He bought the shares for about $7.14 a piece.
Bank of America is up 5.05% this year and currently trades at $23.70.
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