Sept. 24 (Bloomberg) -- Goldman Sachs Group Inc., the most profitable firm on Wall Street, plans to raise $5 billion in a stock offering, double what the bank had originally sought, two people familiar with the situation said.

The bank increased the size in a so-called accelerated book-building, said the people, who declined to be identified because the terms haven't been made public. Goldman spokesman Lucas van Praag declined to comment.

Goldman Chief Executive Officer Lloyd Blankfein is also raising $5 billion from Warren Buffett's Berkshire Hathaway Inc. in a plan to shore up the firm's capital base and restore market confidence. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 fueled fears that other firms that rely on short- term funding from the capital markets may be vulnerable.

``The endorsement of Warren Buffett should quickly end credit market debate about the capitalization and liquidity position of Goldman Sachs,'' Brad Hintz, an analyst at Sanford C. Bernstein & Co. who rates Goldman stock ```market perform, said in a note to clients today.

The decision to seek a cash infusion marks a reversal for Goldman, which less than a year ago was posting record profits and paying record bonuses. Blankfein and his two top deputies reaped payouts totaling more than $67 million in 2007.

The company, while suffering from a decline in trading and investment banking revenue, has booked $4.9 billion of losses on devalued assets, a fraction of the writedowns taken by rivals such as Citigroup Inc., Merrill Lynch and Morgan Stanley.

Omaha, Nebraska-based Berkshire Hathaway is buying $5 billion of perpetual preferred shares that pay a dividend of 10 percent, Goldman said in a statement yesterday. The securities can be repurchased by Goldman at any time on condition it pays a 10 percent premium. Berkshire is also getting warrants to buy $5 billion of common stock at $115 apiece, 8 percent less than Goldman's closing share price of $125.05 in New York yesterday.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: September 24, 2008 07:52 EDT