Could a voicemail that languished for months inside Warren Buffett’s cellphone have saved Lehman Brothers?
This is the tale recounted from Time’s Karen Tumulty, who was reporting on Buffett’s appearance with his longtime friend and Fortune senior editor-at-large Carol Loomis at a conference:
As you can imagine, Buffett was hearing from a lot of people on that crazy weekend exactly a year ago, when the financial world was falling apart. AIG, desperate to come up with $18 billion, begged him for help. ‘Don’t waste your time on me,’ he told them. ‘I’m not going to be able to do anything for you.’ And around 6 p.m. on that Saturday night, as Buffett was rushing out to a social engagement in Edmonton, Alberta, he got a call from Bob Diamond, the head of Barclays Capital. Diamond was trying to buy Lehman Brothers and rescue it from oblivion, but he was having trouble with British authorities. So he had come up with another plan, one in which Buffett would provide insurance that might make it all work. It was all too complicated for Buffett to take in in a quick phone call, so he asked Diamond to fax him the details. Buffett got back to his hotel room around midnight and was surprised to find ＃ nothing. Lehman went under, and within days, the world was in a full-blown financial crisis.
Fast forward 10 months. Buffett, who admits he never has really learned the basics of his cell phone, asked his daughter Susan about a little indicator he had noticed on the screen: ‘Can you figure out what’s on there?’ It turned out to be the message from Diamond that he had been waiting for that night. (NOTE: Which raises another question: Why didn’t Diamond use the fax, like Buffett asked him to?)
As we already know, Buffett fielded plenty of phone calls during the height of the crisis. And sometimes he even agreed to help out the panicked financier at the other end of the line, but always for a hefty price. At the peak of the financial tremors last autumn, he sank some $5 billion into Goldman Sachs Group Inc. and received 10% cumulative preferred shares in return. He also snapped up perpetual preferred shares and warrants of General Electric two weeks later.
MarketBeat cubicle-mates suggest that perhaps the lesson here is that you never want to find yourself in position where a do-or-die business deal depends solely on a septogenarian’s ability to operate a cellphone. On the other hand, all technology issues aside, you could also argue that Buffett proved himself plenty savvy working the phones during the crisis.