"Stock God" Buffett's Berkshire Hathaway continues its "clearance-style sell-off", reducing its stake further to 10.3%, approaching the crucial regulatory threshold. $Bank of America (BAC.US)$ The action of "Stock God" Buffett's Berkshire Hathaway continues, reducing its stake further to 10.3%, nearing the critical threshold for regulation.

According to a new document submitted to the SEC, $Berkshire Hathaway-B (BRK.B.US)$ For three consecutive trading days on September 25, 26, and 27, 2024, Berkshire Hathaway reduced its holdings of Bank of America stocks, selling a total of 11.678 million shares and cashing out approximately $0.461 billion. Bank of America is Berkshire Hathaway's third largest holding.

In fact, since mid-July, Buffett has sold Bank of America shares over a dozen times, totaling approximately $9.4 billion in profit, showing signs of clearing out. After the latest sell-off, Berkshire Hathaway still holds 10.3% stake in the second largest bank in the USA, approaching the critical regulatory threshold of 10%.

Reportedly, once the shareholding percentage falls below this threshold, Buffett will no longer need to disclose his trading activity within two business days. In fact, he himself prefers to buy and sell stocks without rapid public disclosure.

Some analysts believe that if Buffett sticks to his current course, his holding in bank of america will drop to below 10% in about a week, thereby avoiding immediate disclosure of the transaction. Once Berkshire's holdings fall below this level, it can switch to providing quarterly updates.

Nevertheless, based on Friday's closing price, Berkshire's remaining stake in the bank is valued at nearly $32 billion, remaining the largest shareholder of bank of america.

In 2011, Buffett established Berkshire's investment in Bank of America through a $5 billion deal involving preferred stock and warrants. Over the years, Buffett has been increasing his holding positions in Bank of America and praising the bank's leadership, but so far, he has not publicly explained his recent selling decision.

Some analysts believe that the reasons include the high valuation of Bank of America and the Federal Reserve's rate cut action after a four-and-a-half-year interval. It is understood that Bank of America is very sensitive to changes in interest rate cycles, even more sensitive than its peers in the banking industry.

In March 2022, when the Federal Reserve began its most aggressive rate hike cycle in 40 years, Bank of America made huge profits from it. The Fed's 50 basis points "aggressive magnitude" last week, as well as potential future rate cuts, mean that Bank of America's net interest income may be more severely impacted than its peers.

As for whether Buffett's consecutive selling spree really means he is going to clear out Bank of America, it is still unknown. However, based on his usual practice, when he starts selling a stock, he will eventually sell off all shares of that stock. Moreover, in recent years, Berkshire Hathaway has already cleared out stocks of multiple banks, including $U.S. Bancorp (USB.US)$and$Wells Fargo & Co (WFC.US)$N/A.$Bank of New York Mellon (BK.US)$.

Editor/Rocky