Warren Buffett Trims Bank of America Stake

Warren Buffett’s Berkshire Hathaway Inc. has systematically reduced its stake in Bank of America Corp. over the past few weeks.

This marks a significant shift in Buffett’s investment strategy, as the conglomerate has sold shares for the 12th consecutive day, reducing 8.8% of its holdings, valued at approximately $3.8 billion, since mid-July.

Recent Sales by Berkshire Hathaway:

In the most recent transactions from July 30 through August 1, Berkshire Hathaway sold shares worth $779 million. Despite these sales, the company still retains more than 942 million shares of Bank of America, with a market value of $37.2 billion based on the latest closing price.

The disposals come after a strong performance by Bank of America’s stock, which had surged 31% earlier this year. However, since the start of the selling spree, the stock price has declined by over 10%, aligning with the broader KBW Bank Index. As of now, the stock is priced at $39.50.

Warren Buffett Silence:

Buffett has not publicly disclosed the reasons or future intentions behind this series of sales. This move is particularly noteworthy given Buffett’s longstanding endorsement of Bank of America and its CEO, Brian Moynihan.

Buffett’s initial investment began in 2011 when the stock was trading near $5, and his continued investment had been seen as a strong vote of confidence in the bank’s leadership and performance.

Historical Context:

Buffett’s initial investment in Bank of America during the financial crisis was highly profitable, as the stock has significantly appreciated.

While the recent sales reduced Berkshire Hathaway’s position, they still left the conglomerate with a substantial holding in the bank.