Shares are spiking on Bank of America as billionaire investor Warren Buffett announces he'll invest $5 billion into the ailing bank. Earlier this week, shares in the nation's largest bank had been tanking as investors feared it would have to raise some $50 billion in outside capital and others, such as Business Insider's Henry Blodget, suggested the bank might need a government bailout. Already, the move by the Berkshire Hathaway CEO (who really wants the government to raise his taxes) is being likened to his decision to prop up Goldman Sachs when its stock was tanking during the financial crisis. "Bank of America shares rose 20 percent in pre-market trading on the news," reports Reuters. "Bank of America will sell Berkshire 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend, it said in a statement on Thursday. Bank of America can buy back the investment at any time by paying Buffett a 5 percent premium." The news service notes that shares in the bank lost about a third of their value this month and lost half their value since earlier this year.

"I remain confident that we have the capital and liquidity we need to run our business," Bank of America CEO Brian Moynihan said in a statement. "At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy." Buffett said, "Bank of America is a strong, well-led company... I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them. Bank of America is focused on their customers and on serving them well. That’s what customers want, and that’s the company’s strategy." The New York Times notes that his investment will "help allay market concerns about Bank of America."