Berkshire Hathaway’s recent trend of selling off its Bank of America stake has now stretched to nine consecutive days. This indicates that Warren Buffett’s actions may go beyond simply reducing its long-held investment. Over the course of these nine trading sessions, Berkshire has offloaded a total of 71.2 million shares of the bank, resulting in sales amounting to over $3 billion. The most recent filing shows the sale of 18.4 million shares for $767 million at an average price of $41.65.
Even after the selling frenzy, Berkshire still retains ownership of 961.6 million shares of Bank of America worth $39.5 billion. This position makes BofA the conglomerate’s second-largest equity holding, right behind Apple. However, if Berkshire continues to divest its shares in the bank, Bank of America could potentially drop to third place, falling below American Express’ market value of $37.6 billion.
Warren Buffett’s relationship with Bank of America dates back to 2011 when he invested $5 billion in the bank’s preferred stock and warrants during the aftermath of the financial crisis. This move helped boost confidence in the struggling lender, which was facing losses from subprime mortgages. He exercised those warrants in 2017, solidifying Berkshire’s position as the largest shareholder in Bank of America. Buffett had previously stated that it would be a “long, long time” before he considered selling any shares.
Berkshire’s cost basis on its Bank of America position was approximately $14.15 per share, totaling $14.6 billion by the end of 2021. As of March, the investment had grown to $39.2 billion, and with Bank of America closing at $41.09 on Monday, Berkshire could be capitalizing on the bank’s recent strong performance. In 2024 alone, BofA’s stock has surged by 22%, surpassing the S&P 500 index’s 14.5% return.
Berkshire Hathaway is scheduled to release its second-quarter earnings over the weekend, providing further insights into the conglomerate’s major holdings. The market will be keen to see if Berkshire’s selling streak of Bank of America shares continues and what the rationale behind this decision may be. As one of the most closely watched investors in the world, Warren Buffett’s moves often carry significant weight in the financial markets.