.July 31, 2024 05:27:04 AM

Warren Buffett’s Berkshire Hathaway has sold approximately 18.41 million shares of Bank of America, valued at around $770 million, as part of a broader strategy to offload more than $3 billion worth of shares. Despite the sell-off, Berkshire Hathaway remains a major shareholder in Bank of America, holding about 12.3% of BAC’s outstanding shares, worth approximately $39.51 billion. The sales come after Bank of America’s stock reaches a two-year high, rallying 22% in 2024 due to a strong earnings report and growth in investment banking.

The recent sale of 7.53 million shares on July 26, 2024, at a price of $41.7012 per share, as officially filed on July 30, 2024, further demonstrates Berkshire Hathaway’s strategic reduction of its stake in Bank of America. Following this transaction, Berkshire Hathaway Inc now holds approximately 966.91 million shares of Bank of America Corp. This insider trading activity provides a clear view of Berkshire Hathaway’s ongoing adjustments to its investment portfolio.

Buffett’s relationship with Bank of America dates back to 2011 when he invested $5 billion during the financial crisis, boosting confidence in the lender. In 2017, Berkshire became the largest shareholder in Bank of America by converting warrants acquired during the crisis. The recent sales of Bank of America shares are part of Buffett’s broader strategy to adjust Berkshire Hathaway’s investment portfolio, which includes reducing stakes in both Bank of America and Apple. This move reflects anticipation of an increase in the federal tax rate on gains and aims to optimize the portfolio’s performance.

Berkshire Hathaway’s investment portfolio is heavily concentrated, with 75% of its investments spread across just five companies, including American Express, Apple, Coca-Cola, Chevron, and Bank of America. The recent sales of Bank of America shares mark a significant shift in Berkshire Hathaway’s investment strategy, capitalizing on the strong performance of the bank’s stock in 2024. Despite the sell-off, Berkshire Hathaway’s substantial stake in Bank of America reflects ongoing confidence in the bank’s fundamentals and future prospects.