Warren Buffett's Berkshire Hathaway Sells More Bank of America Shares
Warren Buffett's Berkshire Hathaway has continued to sell its Bank of America shares this week, according to data from Bloomberg. The total proceeds from the sale of these shares have exceeded $370 million this week. The selling spree started in mid-July.
Berkshire's Stake in Bank of America Now Under 10%
Berkshire's stake in Bank of America has now dropped below 10%, currently standing at 9.88%. This means that instead of having to disclose trades every few days, they can now be done quarterly. The current valuation of the position is approximately $32.64 billion, as of Thursday's close.
Bank of America's Share Buyback Pushes Berkshire's Stake Over 10%
Bloomberg reports that a recent multi-billion share buyback by Bank of America pushed Berkshire's stake back over the 10% mark. Prior to this, Buffett's earlier rounds of selling had already reduced the holding to less than 10% of the Bank of America shares known to be in circulation. However, the lender announced on Tuesday that it had repurchased $3.5 billion of stock during the third quarter, pushing Berkshire back above the key regulatory threshold.
Berkshire's First Round of Selling BofA Shares Since the Pandemic
This latest round of selling marks the first time Berkshire has sold Bank of America shares since just before the pandemic. Despite this, Buffett remains the bank's top shareholder.
Bank of America's Third-Quarter Earnings
On Tuesday, Bank of America released its third-quarter earnings. The report revealed a cycle low in net interest income, while charge-offs and credit losses surged to their highest levels in years. Neither Buffett nor Berkshire Hathaway have made any public statements regarding their ongoing sale of Bank of America shares.
Speculations on Reasons for the Sale
Following the earnings report, there has been speculation about the reasons behind the sudden unloading of shares. However, no official reasons have been provided.
Bottom Line
The recent sale of Bank of America shares by Berkshire Hathaway raises questions about the future of the bank and its performance. With the bank's third-quarter earnings revealing a surge in charge-offs and credit losses, it's clear that the financial landscape is changing. What do you think about this development? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, which is available every day at 6 pm.
