Warren Buffett’s Berkshire Hathaway has been actively reducing its holdings in Bank of America, shedding a total of 19.2 million BofA shares over the course of three days. This selling spree, totaling almost $779 million, has been ongoing for the past 12 consecutive days, resulting in total sales exceeding $3.8 billion.
As a result of the continuous selling, Bank of America has slipped to the third spot on Berkshire’s list of top holdings. The current top positions are held by Apple and American Express. Before the selling activity, BofA was Berkshire’s second largest holding. Despite these sales, Berkshire remains the bank’s largest shareholder with a 12.1% stake.
The recent selling activity has coincided with a 5.2% drop in Bank of America’s stock price for the week, reaching as low as $38.98 in Thursday’s trading session. However, year-to-date, BofA is still up more than 17%, outperforming the S&P 500. At Thursday’s close, the remaining 942.4 million shares held by Berkshire had a market value of $37.2 billion.
Warren Buffett’s relationship with Bank of America dates back to 2011 when he famously purchased $5 billion worth of BofA’s preferred stock and warrants. This investment was made in the aftermath of the financial crisis, boosting confidence in the struggling lender. In 2017, Buffett converted those warrants, solidifying Berkshire’s position as the largest shareholder in BofA. At that time, Buffett expressed his admiration for the business, valuation, and management of the bank.
Under the leadership of Brian Moynihan since 2010, Bank of America has reported strong results for the second quarter, showcasing growth in investment banking and asset management fees. The bank also expressed optimism regarding net interest income, despite concerns surrounding recession fears in the financial sector. Buffett’s decision to sell shares amid positive news from the bank reflects a strategic shift in Berkshire’s investment portfolio.