Warren Buffett takes the trading floor before Berkshire Hathaway's annual meeting of shareholders on May 3, 2024 in Omaha, Nebraska.
David A. Grogen |
Berkshire-Hathaway cut his gigantic Bank of America Following the bank's strong run in 2024, a stake is held for the first time in 4½ years.
Warren Buffett's conglomerate sold 33.9 million shares of Bank of America worth nearly $1.5 billion in retail sales on Wednesday, Thursday and Friday at an average selling price of $43.56, a regulatory filing showed.
It was the first time since the fourth quarter of 2019 that the Omaha, Nebraska-based conglomerate has reduced its stake. Nevertheless, Bank of America remains Berkshire’s second-largest holding after Appleand holds 999 million shares with a market value of nearly $43 billion.
Berkshire could take some profits as Bank of America is up 27.4% so far this year to its highest level since March 2022. In the first quarter, Buffett reduced Berkshire's Apple holding by 13% for tax reasons after it posted significant gains.
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Bank of America
Bank of America shares fell slightly on Monday following the news.
Bathtub idea
The Oracle of Omaha's purchase of Bank of America has become one of Wall Street's most endearing stories. In 2011, the legendary investor bought $5 billion worth of the bank's preferred stock and warrants to bolster confidence in the bank, which was struggling with losses related to subprime mortgages in the wake of the financial crisis.
Buffett later admitted that the idea came to him while bathing in his bathtub.
“By the way, this BofA purchase, it was literally true that I was sitting in the bathtub when I came up with the idea of asking … BofA if they would be interested in this preferred stock,” he said at Berkshire's annual meeting in 2017, when he first converted the warrants and added the bank's shares to his portfolio.
The 93-year-old investor said he was impressed with CEO Brian Moynihan's leadership and the franchise's ability to generate profits.
Moynihan later recalled that Buffett initially tried to reach him on Bank of America's public phone line but was turned away by the call center. Despite the confusion, the deal was done within hours, he said.