Berkshire Hathaway, the conglomerate led by Warren Buffett, made headlines by trimming its significant Bank of America holding for the first time in over four years. The move came after Bank of America’s impressive run in 2024, with Berkshire selling 33.9 million shares of the bank in separate transactions totaling nearly $1.5 billion.
The sale, which occurred over three days, resulted in an average selling price of $43.56 per share. This reduction marked the first time since the fourth quarter of 2019 that Berkshire had decreased its stake in Bank of America. Despite this, Bank of America remains the conglomerate’s second-largest equity position, after Apple, holding 999 million shares valued at approximately $43 billion. Berkshire still maintains a significant 10.8% stake in Bank of America.
One possible reason for Berkshire’s decision to trim its Bank of America holding could be to take profits as the bank’s stock rose by 27.4% since the beginning of the year, reaching its highest levels since March 2022. This move aligns with previous actions by Buffett, who had trimmed Berkshire’s Apple holding by 13% in the first quarter for tax-related reasons following substantial gains.
Buffett’s purchase of Bank of America has become a beloved story on Wall Street. In 2011, he invested $5 billion in the bank’s preferred stock and warrants during a time when the lender was struggling with losses from subprime mortgages in the aftermath of the financial crisis. Buffett famously revealed that he came up with the idea for the investment while taking a bath, highlighting the unconventional nature of his decision-making process. Despite initial difficulties in reaching Bank of America’s CEO, Brian Moynihan, the deal was eventually sealed, showcasing Buffett’s persistence and belief in the bank’s potential.
Warren Buffett’s Berkshire Hathaway’s decision to trim its Bank of America holding reflects a strategic move to capitalize on the bank’s recent success. By taking profits and adjusting its portfolio, the conglomerate continues to demonstrate its agility and adaptability in navigating the ever-changing financial landscape. Buffett’s unique approach to investing, coupled with his iconic anecdotes, further solidify his reputation as one of the most respected figures in the world of finance.
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