Berkshire’s BofA stake cuts top $6 billion, analysts say Buffett booking profits

11:57 am Tuesday, September 03rd, 2024

By Arasu Kannagi Basil

(Reuters) – Berkshire Hathaway has offloaded Bank of America shares worth more than a combined $6 billion following a strong run in the second-largest U.S. lender’s stock, with some analysts seeing profit-taking at the heart of the share sales.

The conglomerate late on Friday disclosed it had sold about 21.1 million shares in Bank of America between Aug. 28 and Aug. 30. Berkshire must report its sales until its stake in BofA, which is currently at 11.4%, falls below 10%.

Berkshire has now dumped about 150.1 million shares in Bank of America in several rounds of share sales since mid-July, raking in about $6.2 billion, according to LSEG data.

“The Berkshire BofA sale is just profit taking after being opportunistic when the stock was much cheaper,” said Christopher Marinac, director of research at Janney Montgomery Scott.

BofA’s stock, down 1% on Tuesday, has risen more than 50% since late October. The string of sales, however, has weighed on its shares which have lagged the broader market since Berkshire first disclosed its sales.

Berkshire Hathaway and Bank of America did not immediately respond to Reuters’ requests for comment.

Warren Buffett, one of the world’s most revered investors, started investing in Bank of America in 2011 when Berkshire bought $5 billion of preferred stock.

The purchase signaled his confidence in CEO Brian Moynihan turning around BofA following the 2008 financial crisis.

“Buffett and Berkshire Hathaway have likely trimmed the Bank of America stake to right-size it proportionate to Apple after recently halving that stock,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

The billionaire investor is not commonly known for profit realization through sales, but he does occasionally realize upside, Schulman added.

Berkshire continues to be BofA’s largest shareholder, owning 882.7 million shares worth $35.97 billion as of Friday’s close.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Krishna Chandra Eluri)