Warren Buffett’s Berkshire Hathaway has been on a selling spree when it comes to Bank of America shares. Over the course of 12 consecutive days, the conglomerate has unloaded a total of 19.2 million BofA shares, raking in close to $779 million at an average selling price of $40.52 per share. This move has pushed the total sales figure to over $3.8 billion, showcasing Buffett’s willingness to divest from one of his longstanding investments.
With the recent sell-off, Bank of America has slipped to the No.3 spot on Berkshire’s list of top holdings, trailing behind Apple and American Express. This is a significant shift from its previous position as the conglomerate’s second biggest holding. As of Thursday’s closing, the remaining 942.4 million BofA shares in Berkshire’s possession hold a market value of $37.2 billion at a closing price of $39.50.
Warren Buffett’s relationship with Bank of America dates back to 2011 when he famously invested $5 billion in BofA’s preferred stock and warrants during the aftermath of the financial crisis. This move was instrumental in restoring confidence in the beleaguered lender, which was grappling with losses stemming from subprime mortgages. In 2017, Buffett converted those warrants into shares, making Berkshire the largest shareholder in BofA. At that time, he expressed his admiration for the business, valuation, and management of the Charlotte-based bank.
Despite Bank of America’s positive second-quarter results, which showcased growth in investment banking and asset management fees, the stock has been under pressure due to recession fears plaguing the financial sector. The bank’s stock has experienced a 5.2% decline this week, reaching as low as $38.98 in Thursday’s trading. However, year-to-date, BofA is still up by more than 17%, outperforming the broader S&P 500 index.
Warren Buffett’s decision to offload Bank of America shares reflects a strategic shift in Berkshire Hathaway’s investment portfolio. While the legendary investor has long been associated with the bank and had pledged to hold onto his stake for a considerable period, the recent sell-off demonstrates his readiness to adapt to changing market conditions and capitalize on investment opportunities. As Berkshire continues to navigate the dynamic landscape of the financial markets, Buffett’s next moves will be closely watched by market observers and investors alike.