Source: Jin10 Data

$Berkshire Hathaway-A (BRK.A.US)$ The stock has finally dropped below the critical threshold of 10%, making Warren Buffett's future potential actions in the coming months more unpredictable. After 15 consecutive days of reduction, Berkshire Hathaway reduced its holdings in this Charlotte-based bank to 775 million shares, representing about 9.987%. Since the holdings are now below 10%, Berkshire Hathaway no longer needs to report relevant transactions in a timely manner, which means they no longer need to disclose within two working days. Investors may have to wait until mid-February next year to find out Buffett's exact movements in the 13F filing, which will disclose Berkshire Hathaway's year-end holdings. $Bank of America (BAC.US)$ The stock has finally dropped below the critical threshold of 10%, making Warren Buffett's future potential actions in the coming months more unpredictable. After 15 consecutive days of reduction, Berkshire Hathaway reduced its holdings in this Charlotte-based bank to 775 million shares, representing about 9.987%. Since the holdings are now below 10%, Berkshire Hathaway no longer needs to report relevant transactions in a timely manner, which means they no longer need to disclose within two working days. Investors may have to wait until mid-February next year to find out Buffett's exact movements in the 13F filing, which will disclose Berkshire Hathaway's year-end holdings.

The next 13F filing will be released in mid-November, but will only show the holding situation as of the end of September. However, many have observed that the 94-year-old investment guru needs to continue reducing his stake in Bank of America to ensure his holding remains below 10%. This is because CEO Brian Moynihan recently stated that the bank has bought back a large amount of stock to partially offset the selling by its largest institutional investors, thereby reducing the number of outstanding shares. During Buffett's shareholding reduction, Bank of America's stock has performed well, rising 0.6% in the past three months. As of now, the stock has risen nearly 25% in 2024.

According to Barclays analyst Jason Goldberg, since mid-July, Berkshire has been selling stock in Bank of America almost every day when the stock price exceeds $39.25 per share (a total of 47 days). Berkshire has sold a total of $10.5 billion worth of Bank of America stock, accounting for 25% of its holdings.

Buffett initially acquired this huge stake in two stages. He purchased preferred shares and warrants for $5 billion in 2011 to restore market confidence in this troubled bank, then converted the warrants into common stock in 2017. After obtaining Fed approval to increase his stake to 10%, Buffett bought an additional 0.3 billion shares of stock through open market purchases in 2018 and 2019.

Goldberg estimates the cost basis of the first 7 million shares to be about $7 per share, while the average cost of the remaining 3 million shares is around $30. Analysts suggest that due to tax implications, Berkshire may stop reducing its holdings once it reaches 7 million shares again, which would require another 16.5 days of selling based on its recent trading pattern.

Some speculate that Buffett may completely exit this position. Berkshire's CEO has previously indicated that if his view on a stock changes, he does not like to just reduce his holdings. "When we sell something, it's usually all of our shares," Buffett stated when he completely divested his airline stocks in 2020. "I mean, we don't trim. That's not the way we handle something. It's like if we buy a company 100%, we don't sell it to 90% or 80%.

Of course, due to Buffett's admiration for the management and the deal he personally negotiated in 2011, bank of america's holdings may be a special case. However, Buffett experienced in 2023$SVB Financial (SIVBQ.US)$and$Signature Bank (SBNY.US)$And$First Republic Bank (FRCB.US)$After the collapse of regional banks in the crisis, the attitude towards the banking industry appears negative.

Buffett believes that the bank collapses during the 2008 financial crisis, as well as the crisis in 2023, have weakened public confidence in the entire system. Poor communication between regulatory agencies and politicians has further exacerbated the situation. Meanwhile, digitization and fintech have made bank runs easier during times of crisis. "You don't really know what changes have occurred in the stability of deposits," Buffett said in May 2023. "Everything changed in 2008. It changed again during the [regional bank crisis]. This changed everything. In this situation, we are very cautious about owning banks." Buffett has been consistently selling a series of long-held bank stocks in recent years, including $JPMorgan (JPM.US)$Please use your Futubull account to access the feature.$Goldman Sachs (GS.US)$Please use your Futubull account to access the feature.$Wells Fargo & Co (WFC.US)$ and $Bank of America (BAC.US)$.

Editor / jayden