Berkshire Hathaway sells $6 billion worth of Bank of America shares

Buffett sells BofA: Berkshire Hathaway, led by Warren Buffett, has reduced its stake in Bank of America, selling shares worth more than $6 billion following a strong performance in the lender’s stock. Analysts suggest that these sales are primarily driven by profit-taking.

On Friday, Berkshire disclosed that it had sold approximately 21.1 million shares of Bank of America between August 28 and August 30. 

BofA shares offloaded

Since mid-July, Berkshire has offloaded about 150.1 million BofA shares in multiple transactions, totalling around $6.2 billion in proceeds, according to data from LSEG.

Christopher Marinac, Director of Research at Janney Montgomery Scott, commented, “The sale of Berkshire’s Bank of America shares is a strategic move to take profits after acquiring them at lower prices.”

Bank of America’s stock has surged more than 50% since late October. However, the recent sales have put pressure on the shares, causing them to underperform compared to the broader market.

Bank of America declined to comment, and Berkshire Hathaway did not immediately respond to Reuters’ inquiries.

Buffett's 2011 BofA bet

Warren Buffett, renowned for his investment prowess, began his investment in Bank of America in 2011 with a purchase of $5 billion in preferred stock. 

Deutsche Bank analyst Matt O-Connor speculated, “It’s uncertain how much further Buffett might reduce his holdings, but he might aim to stay just below the 10% threshold to avoid regulatory scrutiny.”

Currently, Berkshire’s stake in Bank of America stands at 11.4%, and the company must report its sales until it falls below the 10% mark.

Berkshire balances portfolio

Michael Ashley Schulman, Chief Investment Officer at Running Point Capital Advisors, suggested, “Berkshire’s reduction in Bank of America shares might be an effort to adjust the portfolio balance, especially after recently cutting its stake in Apple.”

Despite the reduction, Berkshire Hathaway remains Bank of America’s largest shareholder, holding 882.7 million shares valued at $35.97 billion as of Friday’s close.

(With Reuters Inputs)