Warren Buffett walks through the chambers ahead of Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Glogen | CNBC
Berkshire Hathaway has reduced its huge holdings in Bank of America for the first time in four and a half years, following the bank’s strong 2024 performance.
Warren Buffett’s conglomerate sold 33.9 million shares of Bank of America stock at an average price of $43.56 over three days on Wednesday, Thursday and Friday, for about $1.5 billion. Regulatory filings Indicated.
It’s the first time the Omaha-based conglomerate has reduced its holding since the fourth quarter of 2019. Still, Bank of America is Berkshire’s second-largest holding after Apple, with 999 million shares and a market capitalization of nearly $43 billion. Meanwhile, Berkshire remains Bank of America’s largest shareholder, with a 10.8% stake.
Berkshire Hathaway may be taking profits, as Bank of America shares have risen 27.4% so far this year to their highest price since March 2022. In the first quarter, Buffett reduced Berkshire Hathaway’s stake in Apple by 13% for tax reasons after the company made a big profit.
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Bank of America
Bank of America shares fell slightly on Monday following the news.
Bathtub Ideas
The Oracle of Omaha’s takeover of Bank of America has become one of Wall Street’s most beloved stories: The legendary investor bought $5 billion worth of the bank’s preferred stock and warrants in 2011 to shore up faith in the lender as it struggled with subprime mortgage-related losses in the aftermath of the financial crisis.
Buffett later revealed that the idea came to him while he was taking a bath at home.
“By the way, the Bank of America purchase was literally when I was sitting in the bathtub thinking to see if Bank of America would be interested in their preferred stock,” he said at Berkshire’s annual meeting in 2017. He converted the warrants for the first time and added bank stocks to his portfolio.
The 93-year-old investor said he was attracted to CEO Brian Moynihan’s leadership and the franchise’s ability to generate profits.
Moynihan later recalled that Buffett initially tried to contact him through Bank of America’s public phone lines but was turned away by the call center. Despite the confusion, he said, the deal was finalized within hours.
