Warren Buffett’s Berkshire Hathaway has recently sold off more shares in Bank of America, totaling about $9 billion since July, according to the latest filing. The conglomerate sold approximately 21 million shares between September 20 and September 24, following previous sales of around 45.6 million shares earlier in the month. Despite these sales, Berkshire still remains the largest shareholder in Bank of America, owning a 10.5% stake valued at $32.13 billion.
Bank of America CEO Brian Moynihan recently praised Warren Buffett, calling him a “great investor” who has stabilized the company. Buffett initially invested in the bank in 2011 with a $5 billion purchase of preferred stock, showing his confidence in Moynihan’s ability to lead the bank to recovery after the 2008 financial crisis. In 2017, Buffett swapped the preferred stock for common stock. Despite exiting other banking sector investments, Buffett expressed his liking for Moynihan in a CNBC interview in April 2023 and stated that he did not want to sell Bank of America’s stock at the time.
Berkshire Hathaway’s decision to sell Bank of America shares raises questions about its future stake in the company, as once its ownership dips below 10%, it will no longer be required to report stake sales regularly. BofA’s shares were slightly down in premarket trading, although they have risen approximately 17% year-to-date, outperforming the S&P 500 Banks Index, which is up nearly 19%. The S&P 500 has gained around 20% year-to-date, indicating a positive trend in the overall market.
Despite the recent share sales, Warren Buffett’s history with Bank of America has been significant, with his initial investment in 2011 demonstrating his confidence in the bank’s leadership and potential for growth. Berkshire Hathaway’s decision to sell off shares may signal a shift in its investment strategy or portfolio allocation, as Buffett has previously shown a strong liking for Bank of America and its CEO. Investors will be watching closely to see how Berkshire’s stake in the bank evolves in the coming months.
It will be interesting to see how Bank of America’s stock performance is impacted by Berkshire Hathaway’s ongoing share sales, as Buffett’s involvement in the company has been viewed as a stabilizing force in the past. The banking sector as a whole has seen positive growth this year, with Bank of America outperforming the S&P 500 Banks Index. As Berkshire Hathaway continues to adjust its investment portfolio, its actions in relation to Bank of America will be closely monitored by investors and analysts alike.
