Meredith Whitney Calls Goldman Sachs (GS) Capital Raise "Exorbitantly Expensive"

Oppenheimer's banking analyst Meredith Whitney weighed in on Goldman Sachs (NYSE: GS), following Warren Buffett's $5 billion preferred share investment and the company's $5 billion common stock offering.

Whitney called the terms "exorbitantly expensive." She also said it shows how truly challenging current market conditions are.

Whitney lowered 2008 EPS estimates on Goldman Sachs to $11.58 and 2009 EPS to $9.21.

Buffett agreed to buy $5 billion in perpetual preferred from Goldman Sachs. The preferred shares pay a 10% dividend. Buffett will also receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, which are exercisable at any time for a five year term. Goldman can call the preferred shares at any time at a 10% premium. In addition, Goldman sold 40.65 million common shares at $123 per share.

Shares of Goldman Sachs are up 5.7% today to $132.20.

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