Warren Buffett’s Berkshire Hathaway sold about $900 million of its stake in Bank of America this week, cutting its holdings in America’s second-largest lender to near the key reporting threshold.
Berkshire’s stake in Bank of America now amounts to 10.8% of outstanding shares, or about $34 billion. Berkshire, which remains one of Bank of America’s largest shareholders, will have to continue to report its stake regularly as long as its stake is above 10%.
Last week, the Omaha, Nebraska-based group disclosed that it sold about 5.8 million Bank of America shares between Sept. 6 and Sept. 10.
Buffett has not publicly explained why Berkshire is cutting its stake in Bank of America, though he has praised the company in the past. The billionaire investor initially bought $5 billion of preferred stock and warrants in the bank in 2011. He converted that stake into common stock several years later after Bank of America reported a bump in earnings.
Berkshire’s proceeds from selling Bank of America shares that began in July, plus profits it has made since 2011, now exceed $14.6 billion from the company’s investments in the bank, according to calculations by Bloomberg News. The calculations do not include the impact of taxes, Bloomberg said.
When asked recently about the Berkshire sale, Bank of America CEO Brian Moynihan said he was not in a position to talk to Buffett about the matter.
“I don’t know exactly what he does, because frankly we can’t ask him,” Moynihan said at a financial conference in New York last week. However, he described Buffett as a “great” investor for the bank.
Analysts quoted by Reuters have suggested that Berkshire may try to reduce its holdings below the 10% threshold to avoid regulatory scrutiny. Once it controls less than that level, Berkshire may choose to disclose its Bank of America stake less frequently and perhaps only in its quarterly updates, Bloomberg reported.
(Reuters contributed to this report.)
Comments are closed, but trackbacks and pingbacks are open.