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Buffett cuts Bank of America stake, sales top $3 billion

Published 30/07/2024, 10:13 pm
© Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett attends the Berkshire Hathaway Inc annual shareholders' meeting in Omaha, Nebraska, U.S., May 3, 2024. REUTERS/Scott Morgan/File Photo
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By Jonathan Stempel

(Reuters) -Warren Buffett's Berkshire Hathaway (NYSE:BRKa) sold more Bank of America (NYSE:BAC) shares, boosting sales to more than $3 billion this month, taking profits after a big run-up in the second-largest U.S. bank's stock price.

Berkshire sold 18.4 million Bank of America shares for $767 million between July 25 and 29, according to a Monday night regulatory filing.

It has sold 71.2 million shares for $3.05 billion since July 17, reducing its holdings in the Charlotte, North Carolina-based lender by 6.9% to 961.5 million shares.

Buffett's conglomerate remains Bank of America's largest shareholder, with a 12.4% stake worth $39.5 billion as of Monday's close. It must report sales until the stake falls below 10%.

Berkshire and Bank of America declined to comment on Tuesday.

Shares of Bank of America rose as much as 1.9% in morning trading, but have fallen since Berkshire's selling began.

Bank of America's stock price has risen by nearly two-thirds since late October. The stock trades at 1.2 times book value, after trading below book value for most of the last decade.

Buffett has long supported the leadership of Brian Moynihan, the bank's chief executive since 2010.

Berkshire bought $5 billion of Bank of America preferred stock in 2011, when some investors worried if the bank would have enough capital after cleaning up huge mortgage and legal liabilities from the 2008 financial crisis.

Buffett swapped the preferred stock for common stock in 2017 after exercising warrants, and ultimately spent $14.6 billion on Bank of America shares. Those shares were worth more than $45 billion when Berkshire's selling began.

The sales came a little over a year after the 93-year-old billionaire singled out Bank of America and Moynihan for praise, even as Berkshire sold other bank stocks.

"I like Brian Moynihan enormously," Buffett told CNBC in April 2023. "I don't want to sell it."

Berkshire has also been selling Apple (NASDAQ:AAPL), shedding about 115 million shares in the first quarter.

It may disclose more sales when it releases second-quarter results on Saturday.

© Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett attends the Berkshire Hathaway Inc annual shareholders' meeting in Omaha, Nebraska, U.S., May 3, 2024. REUTERS/Scott Morgan/File Photo

Buffett said at Berkshire's May 4 annual meeting that he expected the iPhone maker to remain Berkshire's largest stock investment, but selling made sense because the 21% federal tax rate on gains would likely grow.

Berkshire is based in Omaha, Nebraska. Its dozens of businesses include Geico car insurance and the BNSF railroad.

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