Buffet had these comments for the Kraft deal that closed yesterday:
Mr Buffett, who holds more than 9 per cent of Kraft, said the company was worth more than its current stock price – down 2 per cent at $28.72 in early Wall Street trading on Wednesday – and that its use of stock in the Cadbury deal was “very expensive currency”
Can someone clarify what he meant by this? I'm guessing he meant Kraft's cost of capital for raising this equity was too high for his liking...
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He didn't want to see the board issue new shares to get this deal through. If they were making the buy he wanted more cash and less stock since he considers the stock undervalued basically.
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