Warren Buffett’s Berkshire Hathaway has been consistently selling off Bank of America shares over the past 12 days. The latest regulatory filing reveals that the conglomerate shed 19.2 million BofA shares for almost $779 million, bringing the total sales to over $3.8 billion.
With the recent selling activity, Bank of America has slipped from being Berkshire Hathaway’s second biggest holding to the No.3 spot. Apple and American Express now hold the top spots, with BofA trailing behind with a market value of $37.2 billion. Despite the decrease in holdings, Berkshire still remains the bank’s largest shareholder with a 12.1% stake.
The decrease in Bank of America holdings comes as the bank stock has seen a 5.2% drop this week, reaching a low of $38.98 in Thursday’s trading. Recession fears affecting the financial sector could be influencing Buffett’s decision to trim his BofA holdings.
Back in 2011, Warren Buffett famously invested $5 billion in BofA’s preferred stock and warrants following the financial crisis. This move helped boost confidence in the struggling lender at the time. In 2017, Berkshire converted those warrants into common stock, making Buffett the largest shareholder in BofA. Despite his initial vote of confidence in the bank’s business, valuation, and management, Buffett has now decided to reduce his stake.
Under the leadership of Brian Moynihan, Bank of America reported strong results for the second quarter, showing growth in investment banking and asset management fees. The bank also expressed optimism about its net interest income in the near future.
Warren Buffett’s ongoing selling of Bank of America shares reflects a shift in his investment strategy and may indicate concerns about the bank’s performance in the current economic climate. As a legendary investor, Buffett’s decisions often carry significant weight in the market, and his actions with regards to BofA could influence other investors’ perceptions of the bank’s future prospects.