Investor Warren Buffett’s company, Berkshire Hathaway, has been reducing its stake in Bank of America by selling approximately 25 million shares, totaling close to $1 billion, within the past week. Since July, Berkshire Hathaway has divested 116 million Bank of America shares, yet it still holds nearly 12% of the bank’s stock based in Charlotte, North Carolina. Following the disclosure of this sale, Berkshire’s Class A stock, already the most expensive on Wall Street, saw an increase of $7,184.62 on Wednesday, reaching a selling price of $698,534.62. This hike propelled the Omaha-based conglomerate into the realm of companies valued at over $1 trillion by the stock market, although still trailing behind giants like Nvidia and Microsoft with valuations exceeding $3 trillion.
Despite the selling trend seen in Bank of America shares, it remains one of Berkshire’s significant investments, trailing only behind its substantial Apple stake and long-standing American Express investment. Earlier this month, Buffett surprised many by halving the Apple investment, which led to a record-high $277 billion cash reserve by June 30. With the recent Bank of America stock sales and profits from its diverse portfolio of companies including BNSF railroad, Geico insurance, various utilities, and retail and manufacturing businesses, Berkshire’s cash reserves have continued to increase. Observers suggest that Buffett’s recent stock sales may indicate his belief that the market is overvalued, potentially positioning himself to capitalize on a market downturn.
Buffett, known for his discreet investment strategies, does not typically disclose his reasons for buying or selling specific stocks during the process. He prefers to keep his investment moves confidential to prevent other investors from mimicking his actions. However, due to Berkshire Hathaway owning more than 10% of Bank of America, the Securities and Exchange Commission mandates updates on its holdings. Buffett initiated the selling of Berkshire’s Bank of America shares after they reached a 52-week high of $44.44 in July. The recent sales were conducted at average prices slightly below $40 per share, with the stock experiencing a 1% increase on Wednesday, reaching $40.07.