Warren Buffett walks the floor prior to Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | CNBC
Berkshire Hathaway, led by Warren Buffett, cut its stake in Bank of America to less than 10% amid a sell-off that began in mid-July.
Buffett said in a filing with the U.S. Securities and Exchange Commission Thursday night that he sold more than 9.5 million shares in three separate transactions between Tuesday and Thursday. The move will reduce his holdings to 775 million shares, or about 9.987%.
Holdings are currently below the key 10% threshold; Berkshire There is no longer a need to report related transactions in a timely manner. The SEC requires shareholders who own 10% or more of a company’s stock to report transactions involving that company’s stock within two business days.
Buffett watchers won’t be able to find out what Omaha’s next move will be for a while. The next 13F filing in mid-November will only reveal Berkshire’s stock holdings as of the end of September. Berkshire remains BofA’s largest institutional investor.
Despite Berkshire’s sale, the bank’s stock price has risen about 1% over the past month. Bank of America CEO Brian Moynihan has previously said the market is absorbing the stock through the bank’s own buybacks.
Buffett famously bought $5 billion worth of Bank of America’s preferred stock and warrants in 2011 to shore up confidence in the bank, which had suffered in the wake of the subprime mortgage crisis. He converted the warrants into common stock in 2017, making Berkshire the bank’s largest shareholder. Buffett then added another 300 million shares to his bet in 2018 and 2019.
“Very cautious.”
The recent sale of BofA comes after Buffett has spent the past few years unloading various long-term holdings in the banking industry, including JPMorgan, Goldman Sachs, Wells Fargo and US Bancorp. crisis.
“I have no idea what happened to the stickiness of deposits,” Buffett said. “That changed by 2008. That changed with this. And that changes everything. In a situation like this, we’re very cautious about bank ownership.”
Buffett believes that bank failures in 2008 during the global financial crisis and another in 2023 are due to poor messaging from regulators and politicians, leading to a decline in confidence in the system. . Meanwhile, digitalization and fintech have made bank runs easier during crises.
