Last week, renowned investor Warren Buffett and his company, Berkshire Hathaway, made headlines by reducing their stake in Bank of America (BofA) for the 14th time. Since mid-July, they have sold off more than $10 billion worth of shares, bringing their ownership just above the 10% reporting threshold.
Recent filings reveal that Berkshire sold 9.6 million shares of BofA on March 3, April 4, and July 7, at an average price of about $40 per share, resulting in approximately $3.83 billion in cash. Currently, the company holds 784.5 million shares, which now represent 10.1% of the bank.
If Buffett continues to cut back on his holdings in BofA, the stake could potentially drop below 10%. This would mean that Berkshire would no longer be required to file reports with the Securities and Exchange Commission (SEC) within two trading days after making any changes.
Since mid-July, Berkshire has sold around 250 million shares of BofA, raising over $10 billion in the process and creating downward pressure on the bank’s stock price. As of July 7, BofA’s shares closed down 0.4% at $39.96, which is roughly 10% lower than their peak of $44 reached on July 17.
The big question on everyone’s mind now is when Berkshire will stop its share reductions in BofA. In recent years, the company has also divested positions in several major banks, including Wells Fargo, JPMorgan Chase, and U.S. Bancorp.
According to estimates from Barron’s, Berkshire might consider halting its sell-off once its holdings in BofA fall to around 700 million shares.
