Buffett’s Berkshire sells $3.8 billion worth of Bank of America in last week selling spree

Warren Buffett continues his divestiture of Bank of America shares.

On Tuesday, Wednesday, and Thursday, Berkshire Hathaway divested 19.2 million shares of Bank of America for a cumulative sum nearing $779 million, with an average price of $40.52 per share, as per a recent regulatory disclosure.

The conglomerate has been steadily offloading these shares over the past 12 days, now surpassing $3.8 billion in total sales. The remaining 942.4 million shares hold a market valuation of $37.2 billion based on Thursday’s closing price of $39.50.

By the close of trading on Thursday, Bank of America slipped to the third position among Berkshire’s largest holdings, now trailing Apple and American Express, the latter currently valued at $37.7 billion. Prior to this selling spree, Bank of America had long held the position of Berkshire’s second-largest investment.

Despite these sales, Berkshire remains the largest shareholder of the bank with a 12.1% stake.

Bank of America

This week, Bank of America’s stock has declined by 5.2%, reaching as low as $38.98 during Thursday’s trading session amid recessionary concerns within the financial sector. However, on a year-to-date basis, the stock is up over 17%, outperforming the S&P 500.

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Berkshire Hathaway, under the stewardship of billionaire Warren Buffett, has expanded its sale of Bank of America shares, shedding more than $3.8 billion worth of stock in the second-largest U.S. bank since mid-July. Between July 30 and August 1, Berkshire divested approximately 19.2 million shares for $779 million, according to a regulatory filing released Thursday night.

Since July 17, Berkshire has sold 90.4 million Bank of America shares over 12 consecutive trading days.

As of Thursday, Berkshire maintains ownership of 942.4 million shares, or 12.1% of Bank of America’s reported shares outstanding, valued at approximately $37.2 billion. On Friday morning, Bank of America shares fell by as much as 4.3%. By Thursday’s end, they had declined over 10% since Berkshire began its sales, whereas the KBW Nasdaq Bank Index fell only 2.5%.

The divestitures commenced after Bank of America’s stock price had surged by approximately two-thirds since late October, trading at over 1.2 times its book value.

This appreciation increased the value of Berkshire’s shares to over $45 billion, more than triple the $14.6 billion originally paid for them.

Berkshire is mandated to continue reporting sales until its stake falls below 10%. The company is scheduled to report its second-quarter earnings on Saturday morning.

Buffett, at 93, remains one of the most esteemed investors globally, having invested continuously in Bank of America since 2011, when Berkshire acquired $5 billion of preferred stock. This acquisition underscored Buffett’s confidence in Bank of America CEO Brian Moynihan’s ability to rehabilitate the bank post the 2008 financial crisis.

In an April 2023 interview with CNBC, Buffett expressed his considerable admiration for Moynihan and stated he had no intention of selling the bank’s stock at that time.

Berkshire, headquartered in Omaha, Nebraska, operates a diverse array of businesses including Geico car insurance, the BNSF railroad, and numerous insurance, energy, industrial, and retail enterprises.