Berkshire Hathaway Boosts Bank of America Stock Sales

Warren Buffett simplifies his portfolio, unloading nearly $10 billion in Bank of America stock this week. Discover the implications for investors.

Berkshire Hathaway has recently executed a significant divestiture of its holdings in Bank of America, a move that has propelled its total sales since mid-July to an impressive nearly $10 billion. This strategic maneuver, orchestrated by the venerable Warren Buffett, aims to streamline the intricate tapestry of his conglomerate's extensive portfolio. In a regulatory filing submitted on Wednesday evening, Berkshire disclosed the sale of 8.55 million shares of Bank of America, netting approximately $337.9 million. Cumulatively, the company has offloaded around 238.7 million shares, which constitutes roughly 23% of its total holdings since the middle of July.

Despite this substantial reduction, Berkshire retains a significant stake in Bank of America, currently owning about 10.2% of the institution, a figure that may be marginally higher pending the bank's disclosure of recent stock buybacks. It is imperative for Berkshire to continue its reporting of sales until its ownership dips below the 10% threshold. Following this, investors will likely have to exercise patience, awaiting Berkshire's quarterly financial disclosures to ascertain any further divestitures.

The U.S. Securities and Exchange Commission mandates that shareholders possessing more than 10% of a company's stock disclose any purchases or sales within a two-business-day window. This recent selling spree effectively reduces what was once Berkshire's second-largest stock holding, a position that originated from a substantial $5 billion investment made in 2011. Notably, the company has also significantly reduced its largest stock holding, Apple, by more than half during the first half of the year.

In a further display of strategic acumen, Buffett, now 94, has tied up another loose end by finalizing an agreement to acquire the remaining 8% of Berkshire Hathaway Energy that it did not previously own, purchasing it from the estate of the late billionaire philanthropist Walter Scott. As of June, Berkshire boasted a staggering $276.9 billion in cash reserves, of which $2.37 billion will be allocated to this energy transaction. Since assuming the helm of Berkshire in 1965, Buffett has overseen a diverse array of businesses, including the BNSF railroad, Geico car insurance, and a medley of smaller operations such as Dairy Queen and See's Candies.