Warren Buffett’s Berkshire Hathaway Reduces Stake in Bank of America

Warren Buffett’s conglomerate, Berkshire Hathaway, has reduced its stake in Bank of America (BofA) by selling shares worth approximately $845 million.

This move, disclosed in a recent regulatory filing, marks the latest share reductions totaling over $6 billion since July 2024.

The sales have occurred across seven separate rounds, reflecting a strategic shift in Berkshire’s investment in the second-largest U.S. bank.

Recent Share Sales and Historical Context:

Between August 28 and August 30, Berkshire Hathaway sold approximately 21.1 million shares of BofA, continuing to reduce its stake in the bank.

This move is notable given Warren Buffett’s long-standing relationship with Bank of America, which began in 2011 when Berkshire made a significant investment of $5 billion in preferred stock.

This investment was seen as a strong vote of confidence in CEO Brian Moynihan’s ability to guide the bank through its recovery from the 2008 financial crisis.

Changing Sentiments and Market Performance:

Despite Buffett’s previous statements in April 2023, where he expressed admiration for Moynihan and indicated no desire to sell BofA shares, the ongoing sales suggest reconsidering Berkshire’s position.

Throughout 2024, Bank of America shares have gained 21%, slightly underperforming the S&P 500 Banks Index, which has seen a 22.6% increase.

Strategic Implications:

The continued reduction in Berkshire’s holdings in Bank of America signals a strategic adjustment in Buffett’s investment approach, raising questions about the future direction of the conglomerate’s portfolio and its stance on the financial sector.