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Discover Financial Services has boosted its liquidity by receiving $1.2 billion in cash from the U.S. Department of the Treasury's Capital Purchase Program, the credit card company announced late Friday. Discover issued and sold 1.2 million shares of its preferred stock to the Treasury and a 10-year warrant to purchase 20.5 million shares of its common stock at $8.96 per share. To receive Treasury funds, Discover followed rival card brand American Express Co. by becoming a bank holding company under the Bank Holding Company Act of 1956 and a financial holding company under the Gramm-Leach-Bliley Act. Discover's stock was trading at $6.67 per share at 2:30 p.m. Eastern Time today. Discover plans to announce its first-quarter earnings on Thursday.
