Warren Buffett has sold about $10 billion of Bank of America stock — after slashing his Apple stake by nearly 60% – Finapress

Warren Buffett is the CEO of Berkshire Hathaway.Mario Anzuoni/Reuters

  • Warren Buffett has sold 23% of his Bank of America stake for about $10 billion since mid-July.

  • Berkshire Hathaway’s American Express stake is now more priceless than its Bank of America bet.

  • Buffett cashed in about 56% of his massive Apple bet in the first half of this yr.

Warren Buffett has followed up the surprise paring of his Apple stake by taking a knife to a unique of his largest holdings: Bank of America.

The famed investor’s Berkshire Hathaway sold about 239 million shares or around 23% of its stake throughout the banking giant between July 17 and October 2, Securities and Exchange Commission filings show.

Buffett, 94, offloaded the shares at prices ranging from about $39 to $44, generating roughly $10 billion in proceeds — and he won’t be done selling.

Berkshire has slashed its stake from 1.03 billion shares to 794 million shares, reducing its ownership from 13.2% to 10.2%. At Thursday’s close, its remaining shares were price just over $31 billion.

If the conglomerate keeps selling and ceases to be a ten% shareholder, it will not must update the market inside two days of most transactions involving Bank of America stock.

The Wall Street titan was Berkshire’s second-largest holding after Apple on the tip of June — the positions were price about $41 billion and $84 billion each. Buffett’s piece of American Express, price around $41 billion, is now more priceless than his Bank of America bet.

Buffett’s iconic stake in Coca-Cola, price $28 billion, could soon be price more, too, if the disposals proceed or the stocks move the acceptable way. Berkshire is able to disclose the contents of its portfolio as of the tip of September in a mid-November filing.

No explanation yet

The “Oracle of Omaha” hasn’t publicly said why he’s dumping Bank of America, but there are a few plausible reasons. He could also be taking profits after an ideal run: the stock has gained about 50% to this point yr and touched its highest level in over two years on July 17, the day that Buffett began selling.

Buffett cited the prospect of higher capital-gains taxes as one reason for cashing out a number of of his Apple profits, and that is likely to be true for Bank of America, too. Berkshire’s Apple position was price around $174 billion on the tip of 2023, but Buffett and his colleagues cut it by 56% in the first half.

Based on the fee bases of those positions, Berkshire has greater than quintupled its money on Apple and tripled it on Bank of America, and it has now realized a big chunk of those paper gains.

Buffett might also be rebalancing Berkshire’s $300 billion stock portfolio in line with his smaller Apple bet. Or he might have soured on Bank of America’s outlook; he’s exited several of its peers including JPMorgan and Goldman Sachs recently.

There’s also a likelihood he’s gathering money to make an elephant-sized acquisition. But Berkshire has a great deal of dry powder for deals: it held a record $277 billion in liquid investments on the tip of June, after dumping over $90 billion price of stocks throughout the second quarter.

Bathtub billions

Buffett’s Bank of America bet dates back to 2011, when he had the thought to invest throughout the bank while having a shower. He initially got tied up throughout the bank’s call center but eventually reached CEO Brian Moynihan.

The pair agreed Buffett would invest $5 billion in exchange for $5 billion of preferred stock paying a 6% annual dividend, plus warrants to buy 700 million common shares for a set price at any point over the next decade.

Buffett exercised the warrants in 2017, receiving over $20 billion price of common stock at a price of about $5 billion, which he covered by redeeming virtually all of his preferred shares.

True to his bargain-hunter popularity, Buffett topped up his Bank of America stake in 2020, when the pandemic-hit stock was trading around $25. He purchased about $2.1 billion price over 12 consecutive trading days.

He looks to have made a killing on the investment, given he’s now sold nearly 1 / 4 of it for around $40 a share. That’s near 60% greater than his purchase price throughout the summer of 2020, and greater than five times the $7 or so he paid for the vast majority of the position using warrants.

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