Bailout Example

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Buffett made the deal through his holdings company, Berkshire Hathaway

The 61-year-old Dallas Mavericks owner recently called on the administration to look at the example of Warren Buffett as the government tries to bailout aviation industry giant Boeing. The came advice before the parties’ scheduled talks about how to save the aircraft manufacturer from its current troubles.

Cuban particularly pointed towards what the Berkshire Hathaway CEO did with the Bank of America in 2011. He recalled the $5 billion the investing whizz gave the banking institution in exchange for warrants.

Buffett ended up making a whopping $12 billion on the deal as the Bank of America’s stock price rebounded years after the billionaire injected money into it. As Cuban put it, he would strike a similar deal if he was the one negotiating for the taxpayers.

Boeing’s Case

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The official Boeing website lists that the company employs around 145,000 employees across its facilities in the U.S. and the rest of the world

As Cuban further detailed, the American government can bail out Boeing in exchange for warrants as well. It can choose between eventually sharing their shares at a profit or retaining a stake in the aviation giant.

While the ongoing coronavirus pandemic’s impact on the world economy certainly played a role in Boeing's current troubles, some experts are saying that its problems began even before the virus spread.

The company has recently announced that it would be making significant cuts to its workforce due to the ‘different-sized market’ that would be there after the coronavirus lockdowns have been lifted. On the bright side, Boeing offered its employees the chance to leave their job with a severance payment and benefits package.

Cuban’s Offer

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Cuban is known for driving a hard bargain with the entrepreneurs that come to the Tank

Aside from offering sage advice, Cuban also volunteered to play Buffett’s role in the scenario with Boeing. As he declared, he would be willing to wear his ‘Shark Tank hat’ and get a good deal out of the negotiations the same way he does in the hit ABC reality show.

Cuban also expressed his admiration for the aircraft manufacturer, even calling it the ‘greatest company in the world’. He then reiterated how important it is that nothing happens to Boeing.