Warren Buffett's Berkshire Hathaway sold 5.8 million shares of Bank of America stocks from last Friday to this Tuesday, worth approximately 0.2287 billion US dollars. Currently, the holding position of Bank of America has dropped to the third largest for Berkshire, behind Apple and American Express. Analysts believe that Buffett may have reduced the percentage of BofA stocks to below 10% in order to avoid continuing reporting obligations.
Buffett's company has sold nearly $0.2287 billion worth of stocks in the past three days. $Berkshire Hathaway-A (BRK.A.US)$ Buffett's company has sold nearly $0.2287 billion worth of stocks in the past three days. $Bank of America (BAC.US)$ Buffett's company has sold nearly $0.2287 billion worth of stocks.
According to the latest regulatory documents, Berkshire Hathaway sold 5.8 million shares of Bank of America stocks from last Friday to this Tuesday, with a total value of nearly 0.2287 billion dollars and an average selling price of $39.45 per share. This is one of the lowest prices since Buffett started reducing his holdings in mid-July. So far, Berkshire Hathaway has been selling for 12 consecutive trading days, the same as the period from July 17 to August 1.
Since Buffett started reducing his holdings nearly two months ago, Berkshire Hathaway has sold a total of over 0.1747 billion shares of Bank of America stocks, with a total value of 7.2 billion dollars. Currently, Berkshire Hathaway holds 0.8582 billion shares of Bank of America stocks, accounting for 11.1% of the outstanding shares. This position has fallen back to the level of 2018. Based on the closing price of $39.28 on Tuesday, the value of these stocks is approximately 33.7 billion dollars. Bank of America's shareholding has dropped to Berkshire Hathaway's third largest position, behind Apple and American Express. Before the massive sell-off, Bank of America had been Berkshire Hathaway's second largest position.
It is worth noting that analysts pointed out that compared to the previous eight rounds of sell-offs, the recent three-day sell-off has significantly slowed down as the stock price has fallen. Buffett reducing his Bank of America shares to below 10% may be to avoid continuous reporting obligations.
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Bank of America's CEO praised Buffett as a great shareholder.
It is well known that Warren Buffett purchased $5 billion worth of Bank of America preferred stock and warrants after the 2011 financial crisis erupted. He converted these warrants in 2017, making Berkshire Hathaway the largest shareholder of Bank of America, and subsequently increased holdings by around 0.3 billion shares in 2018 and 2019.
Bank of America's CEO Brian Moynihan made rare comments on Warren Buffett's selling behavior at the Barclays Global Financial Services Conference. He stated that although he was unsure of Buffett's specific reasons for selling stocks, he highly appreciated Buffett's investment in Bank of America after the 2011 financial crisis, believing that Buffett's investment helped stabilize the bank at the time of distress due to losses related to subprime mortgage. Moynihan said, 'Buffett is a great shareholder of our company, stabilizing our company when we needed it.'
Moynihan has been serving as the President of Bank of America since 2010. To illustrate how profitable Buffett's investment was, he mentioned that investors could buy in at a low stock price of $5.50 per share when Buffett entered the market, while the stock is currently trading slightly below $40 per share. Moynihan said, 'He just had the courage to do it boldly. It's an excellent return for him. We are pleased he has gained this profit.'
As of the close on Tuesday, Bank of America's stock price has only fallen about 1% since early July, but has risen nearly 16.7% year to date, slightly higher than the performance of the S&P 500 index during the same period.
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Editor/Emily