Berkshire Hathaway, led by Warren Buffett (Trades, Portfolio), has steadily sold shares of Bank of America (BAC, Financial) despite nearing regulatory limits on stake reductions. Over six trading days, from September 30 to October 7, Berkshire sold Bank of America shares worth approximately $675.9 million.
This marked the 14th round of stock sales since mid-July, with Buffett cashing out over $10 billion from Bank of America shares in this period. The recent sales amount was noticeably lower compared to prior rounds, pausing when the stock price hits around $39. As of the last update, Bank of America shares closed at $39.96.
Despite these sales, Berkshire remains the largest shareholder in Bank of America, holding about 10.1% of shares valued at approximately $31.4 billion. Once its stake falls below 10%, regulatory requirements for transaction disclosures will shift from within two days to a quarterly basis.
Bank of America remains the third-largest holding for Berkshire Hathaway. Without considering tax implications, the proceeds from these sales, combined with dividends since 2011, have exceeded the $14.6 billion cost of acquisition.
Buffett has not publicly explained the reason behind this selling spree, though historically, his stock sell-offs usually lead to complete exits. Analysts speculate this could be due to factors like overvaluation of Bank of America and changes in interest rates by the Federal Reserve.
Berkshire has been selling various stocks recently, accumulating cash reserves close to $277 billion by the end of June 2024. The investment strategy seems to favor cash and government bonds, aligning with Buffett's stated preference for cash amid global financial uncertainties.
Furthermore, Berkshire's recent issuance of yen-denominated bonds suggests potential increased investment in Japan, possibly targeting financial and shipping sectors.
