Warren Buffett’s Berkshire Hathaway has made a significant move, shedding nearly a quarter of its massive stake in Bank of America. The sale, which took place between mid-July and early October, saw 239 million shares change hands, generating a staggering $10 billion in proceeds. This reduction in shares brings Berkshire’s ownership from 13.2% to 10.2%, with its remaining stake now valued at around $31 billion.
This move comes on the heels of Buffett’s surprise sale of a significant portion of his Apple holdings earlier this year. Berkshire’s American Express stake has now surpassed its Bank of America investment in value, with Coca-Cola potentially following suit if the sales continue or market trends shift.
The reasons behind Buffett’s decision to sell remain unclear, but speculation abounds. He may be taking profits after a successful run, as Bank of America’s stock has gained around 50% over the past year. Alternatively, he could be rebalancing his portfolio in response to his reduced Apple stake or preparing for a major acquisition. Berkshire’s cash reserves, which stood at a record $277 billion in June, would certainly support such a move.
Buffett’s history with Bank of America dates back to 2011, when he invested $5 billion in exchange for preferred stock and warrants. He exercised those warrants in 2017, receiving over $20 billion in common stock, and later topped up his stake in 2020 during the pandemic. His sale of nearly a quarter of his holdings has yielded a significant profit, with shares selling for around $40 – a 60% increase over his 2020 purchase price.
As Berkshire prepares to disclose its portfolio holdings as of September’s end, investors will be watching closely to see if Buffett’s selling spree continues. One thing is certain: the “Oracle of Omaha” remains a force to be reckoned with in the world of finance.
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