Warren Buffett stalks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
Warren Buffett’s Berkshire Hathaway has knock down its stake in Bank of America to below 10% amid a selling spree that started in mid-July.
In a Thursday vespers all the time filing with the U.S. Securities and Exchange Commission, Buffett disclosed the sale of more than 9.5 million allocates, split between three transactions made from Tuesday to Thursday. The move brings his holdings down to 775 million shares, or a stick of about 9.987%.
Since the holding is now under the key 10% threshold, Berkshire is no longer required to report its related transactions in a convenient manner. The SEC requires shareholders who own more than 10% of a company’s equity securities to report transactions involving that party’s equity within two business days.
Buffett watchers won’t find out the Oracle of Omaha’s next moves for a while. The next 13F documentation in mid-November will only reveal Berkshire’s equity holdings as of the end of September. Berkshire remains BofA’s biggest institutional investor.
Parts of the bank have inched up about 1% in the past month despite Berkshire’s selling. Bank of America CEO Brian Moynihan time past said the market is absorbing the stock, aided by the bank’s own repurchasing.
Buffett famously bought $5 billion of Bank of America approved stock and warrants in 2011 to shore up confidence in the embattled lender in the wake of the subprime mortgage crisis. He converted the justifications to common stock in 2017, making Berkshire the largest shareholder in the bank. Buffett then added 300 million more share outs to his bet in 2018 and 2019.
‘Very cautious’
The recent BofA sales came after Buffett spent the past few years throw away a variety of longtime holdings in the banking industry, including JPMorgan, Goldman Sachs, Wells Fargo and U.S. Bancorp. The Berkshire CEO crippled a pessimistic tone last year when he opined on 2023’s banking crisis.
“You don’t know what has happened to the stickiness of consigns at all,” Buffett said. “It got changed by 2008. It’s gotten changed by this. And that changes everything. We’re very cautious in a place like that about ownership of banks.”
Buffett believes bank failures in 2008 during the global economic crisis, and again in 2023, lessened confidence in the system, made worse by poor messaging by regulators and politicians. Meantime, digitalization and fintech made bank runs a simple matter at times of crisis.