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Warren Buffett has decreased Berkshire Hathaway’s stake in Bank of America to below 10% as part of a recent selling spree that began in mid-July. In a Thursday night filing with the U.S. Securities and Exchange Commission, Buffett revealed the sale of over 9.5 million shares in three transactions conducted from Tuesday to Thursday. This move brings his holdings down to 775 million shares, or a stake of approximately 9.987%. Since the holding is now below the crucial 10% threshold, Berkshire is no longer obligated to report its related transactions promptly. The SEC mandates that shareholders owning more than 10% of a company’s equity securities report transactions involving that company’s equity within two business days. The next 13F filing in mid-November will only disclose Berkshire’s equity holdings as of the end of September. Despite Berkshire’s selling, Bank of America’s stock has increased by about 1% in the past month. Bank of America CEO Brian Moynihan noted that the market is absorbing the stock, aided by the bank’s own repurchasing efforts. Buffett famously bought $5 billion of Bank of America preferred stock and warrants in 2011 during the aftermath of the subprime mortgage crisis. He converted the warrants to common stock in 2017, making Berkshire the largest shareholder in the bank. Buffett added 300 million more shares to his bet in 2018 and 2019. The recent sales of Bank of America shares by Buffett follows his trend of divesting long-held positions in the banking sector, including JPMorgan, Goldman Sachs, Wells Fargo, and U.S. Bancorp. Buffett expressed caution last year regarding the banking industry, citing uncertainties about the stability of deposits and the effects of past banking crises on confidence in the system. He pointed out that failures in 2008 and 2023, combined with poor communication from regulators and politicians, have eroded trust in the banking sector. Additionally, the rise of digitalization and fintech has made bank runs easier during times of crisis.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.
