Warren Buffett walks the floor before Berkshire Hathaway's annual shareholders meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
Warren Buffett's Berkshire Hathaway reduced its stake in Bank of America to less than 10% amid a selling spree that began in mid-July.
In a filing Thursday night with the U.S. Securities and Exchange Commission, Buffett disclosed the sale of more than 9.5 million shares, split between three transactions that took place from Tuesday to Thursday. This move reduces his holdings to 775 million shares, or a stake of about 9.987%.
Since the holding is now below the key 10% threshold, Berkshire It is no longer required to report relevant transactions in a timely manner. The SEC requires shareholders who own more than 10% of a company's securities to report transactions involving that company's stock within two business days.
Buffett watchers won't be able to spot the Oracle of Omaha's next moves 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 the largest institutional investor in Bank of America.
The bank's shares rose about 1% last month despite Berkshire's sale. Bank of America CEO Brian Moynihan said earlier that the market was absorbing the shares, helped by the bank's buybacks.
Buffett bought $5 billion worth of preferred stock and warrants in Bank of America in 2011 to boost confidence in the beleaguered lender 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 an additional 300 million shares to his bet in 2018 and 2019.
“Very careful”
Bank of America's recent sales came after Buffett spent the past few years disposing of a variety of legacy holdings in the banking industry, including JPMorgan, Goldman Sachs, Wells Fargo and U.S. Bancorp. Berkshire's CEO took a pessimistic tone last year when he expressed his opinion on banking in 2023. Disaster.
“You never know what happened to the stability of deposits,” Buffett said. “It changed by 2008. It changed because of this. And that changes everything. We are very cautious in a situation like this in terms of bank ownership.”
Buffett believes that bank failures in 2008 during the global financial crisis, and again in 2023, led to a decline in confidence in the system, exacerbated by weak messaging by regulators and politicians. At the same time, digital transformation and fintech have made bank management simple in times of crisis.
