Warren Buffett takes the stage before Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | David A. Grogen CNBC
Warren Buffett’s Berkshire Hathaway has reduced its stake in Bank of America to below 10% during the sell-off that began in mid-July.
in a Archived Thursday Night Buffett disclosed to the U.S. Securities and Exchange Commission that he sold more than 9.5 million shares, divided into three transactions from Tuesday to Thursday. The move reduced his holdings to 775 million shares, or about 9.987%.
With holdings currently below the critical 10% threshold, Berkshire Timely reporting of related party transactions is no longer required. The SEC requires shareholders who own more than 10% of a company’s equity securities to report transactions involving the company’s equity within two business days.
Buffett watchers won’t know yet what the Oracle of Omaha’s next move will be. The next 13F filing, due in mid-November, will reveal only Berkshire’s holdings as of the end of September. Berkshire remains the largest institutional investor in Bank of America.
Shares of the bank have edged up about 1% over the past month despite Berkshire Hathaway’s selloff. Bank of America CEO Brian Moynihan previously said the market was absorbing the stock, helped by the bank’s own buybacks.
Buffett famously purchased $5 billion worth of Bank of America preferred shares and warrants in 2011 to bolster confidence in the troubled bank following the subprime mortgage crisis. He converted the warrants into common stock in 2017, making Berkshire the bank’s largest shareholder. Subsequently, Buffett added an additional 300 million shares in 2018 and 2019.
“Extremely cautious”
Bank of America’s latest selloff comes after Buffett sold off various long-term holdings in the banking industry over the past few years, including JPMorgan Chase, Goldman Sachs, Wells Fargo and U.S. Bank. It struck a pessimistic tone when expressing its views on the banking industry in 2023.
“You have no idea what happened to the stickiness of deposits,” Buffett said. “By 2008, things changed. That changed. It changed everything. We were very cautious with bank ownership. “
Buffett thinks banks failed in 2008 global financial crisisConfidence in the system has fallen again in 2023, made worse by poor messaging from regulators and politicians. At the same time, digitalization and Fintech Making bank runs a simple matter in times of crisis.
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