Warren Buffett’s Berkshire Hathaway has been steadily selling off its stake in Bank of America, with nearly 25 million shares worth almost $1 billion sold in the past week. This comes after Berkshire has sold off a total of 116 million Bank of America shares since July. Despite the sales, Berkshire still retains control of nearly 12 percent of the stock in the bank.
The recent sale of Bank of America shares caused a significant increase in the value of Berkshire’s Class A stock. It gained $7,184.62 on Wednesday, resulting in a selling price of $698,534.62 per share. This pushed Berkshire’s market valuation to over $1 trillion, although it still falls short of industry giants like Nvidia and Microsoft, which are valued at over $3 trillion.
Although Berkshire has reduced its Bank of America investment, it remains one of the company’s largest investments, surpassed only by its significant stake in Apple and its long-held investment in American Express. The decision to sell off Bank of America shares has raised speculation among Buffett watchers. Some believe that Buffett sees the stock market as overpriced and is positioning himself to take advantage of a potential downturn.
Buffett is known for keeping his investment strategies private. He rarely discusses his buying and selling decisions while he is making them. However, the Securities and Exchange Commission requires him to file updates on Berkshire’s Bank of America holdings due to the company’s ownership of more than 10 percent of the bank.
The sales of Bank of America shares began after the stock reached a 52-week high of $44.44 in July. The recent sales were made at average prices just under $40 per share. As of now, the stock is slightly up at $39.80.
Berkshire’s cash reserves have been growing significantly in recent months. Buffett revealed earlier this month that he had halved the company’s investment in Apple, resulting in a record $277 billion cash pile as of June 30. The recent sales of Bank of America shares, combined with the earnings from Berkshire’s various businesses, including BNSF railroad, Geico insurance, utilities, and retail and manufacturing businesses, have further increased the company’s cash holdings.
In conclusion, Warren Buffett’s Berkshire Hathaway has been gradually selling off its stake in Bank of America, contributing to a rise in the value of its Class A stock. While the reasons behind the sales remain undisclosed, some speculate that Buffett believes the stock market is overpriced and is preparing for a potential downturn. Despite reducing its Bank of America investment, Berkshire still maintains a significant stake in the bank, placing it among the largest investments in the company’s portfolio.
