US Markets
Tuesday, July 30th, 2024 1:46 pm EDT
Key Points
- Berkshire Hathaway’s Sales of Bank of America Shares: The company has been selling off its Bank of America (BofA) shares for nine consecutive days, totaling 71.2 million shares sold for over $3 billion, signaling a significant reduction in its position.
- Current Holdings and Market Value: Despite the recent sell-off, Berkshire still holds 961.6 million shares of BofA, valued at approximately $39.5 billion, making it the company’s second-largest equity holding after Apple.
- Historical Context and Potential Reasons for Selling: Warren Buffett originally invested in BofA during the 2011 financial crisis and converted his warrants in 2017. The recent sales may be a move to take profits after a strong 22% stock rally in 2024, outperforming the S&P 500’s 14.5% return.
Berkshire Hathaway, led by Warren Buffett, has extended its selling streak in Bank of America (BofA) shares to nine consecutive days, suggesting a significant reduction in its long-held position. According to a recent regulatory filing, the conglomerate sold 18.4 million shares from Thursday to Monday, amounting to $767 million at an average price of $41.65 per share. This brings the total sales over the past nine trading sessions to 71.2 million shares, worth over $3 billion. Despite this substantial offloading, Berkshire still retains 961.6 million shares of BofA, valued at approximately $39.5 billion, maintaining its status as the bank’s largest shareholder with a 12.3% stake. However, continued sales could soon see BofA’s ranking fall below that of American Express, currently Berkshire’s third-largest holding at $37.6 billion.
Berkshire’s initial investment in BofA dates back to 2011, when Buffett acquired $5 billion worth of preferred stock and warrants during the financial crisis to bolster the struggling lender. These warrants were converted in 2017, cementing Berkshire as the largest shareholder. Despite previously expressing a long-term commitment to holding the stock, the recent sales suggest a shift in strategy, possibly influenced by BofA’s strong performance this year, with the stock rallying 22%, outperforming the S&P 500’s 14.5% return. Berkshire’s cost basis for the BofA position was approximately $14.15 per share or $14.6 billion, significantly lower than the current market value.
Berkshire’s forthcoming second-quarter earnings release on Saturday will provide additional insights into the company’s portfolio adjustments and overall financial performance. This disclosure will be closely watched for further details on Berkshire’s largest holdings and any continued changes in its investment strategy.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/30/warren-buffetts-berkshire-hathaway-sells-bank-of-america-for-a-ninth-straight-day.html
