Talk about good company: Jamie Dimon didn’t know it, but he had something in common with Warren Buffett early this year, when each high-powered businessman bought a chunk of Bank One Corp. stock.
Dimon bought 2 million shares in late March, when he came aboard as chief executive of the troubled Chicago-based company. He’s said many times that the $56 million investment, made with his own money, stems from his conviction that management should “eat its own home cooking.”
Buffett’s investment firm, Berkshire Hathaway, sampled some of Bank One’s home cooking in the first quarter as well, according to a filing with the Securities and Exchange Commission.
Berkshire Hathaway bought 1,453,100 shares sometime in the first quarter, representing a $34 million to $50 million investment, depending on when the shares were bought. The stake works out to just over 0.1 percent of Bank One’s outstanding shares.
“It seems to me like the perfect kind of Warren Buffett investment,” said Ruchi Madan, a bank analyst at PaineWebber. “The company was broken, and you knew the board was going to do something about it.”
And the board did. Four days before the end of the first quarter, Bank One’s directors hired Dimon, elevating the stock from $28.37 to $32 on rumors of his hiring before it was announced.
Now trading in the mid- to upper-$30s, Bank One’s stock “clearly has a Jamie Dimon premium,” Madan said. She expects more good news from the banking company, but has a “neutral” rating on its stock because so much of the news is already built into its price.
In the cards: American Express Co. introduced a product last week that will allow its cardholders to make online purchases without transmitting account numbers across the Internet.
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Beginning in the next few weeks, cardholders can sign up for the new system at American Express’ Web site. When they are ready to buy items online, they go back to the card company’s site to receive a randomly selected payment number. Cardholders use that number, instead of their credit card number, to make purchase, and must get a new payment number for each purchase.
This is the type of innovative service that the Justice Department argued is rare in the card industry because of the stronghold Visa and MasterCard have on the market. Testimony in the government’s lawsuit against the two major cardholders ended in August.
Bank notes: The Department of Financial Institutions has scheduled a hearing in Chicago on Wednesday regarding its proposed rules to crack down on payday lending. The hearing begins at 2 p.m. on the 15th floor of the James R. Thompson Center.
Prospect Heights-based Household International Inc. hired Sandra Derickson, as chief executive of its private label credit card business. Derickson spent 24 years at GE Capital.