Berkshire Hathaway, The Investment Firm Led By Warren Buffett, Has Recently Sold A Larger Portion Of Its Bank Of America Stocks. The Ceo Of Berkshire Hathaway, However, Has Expressed Uncertainty Regarding The Reasons Behind This Move.

Warren Buffett’s Berkshire Hathaway has recently sold shares worth $228.7 million in Bank of America, as disclosed in a new regulatory filing. This move is part of the company’s ongoing strategy to offload its holdings in the bank. Interestingly, Bank of America’s CEO, Brian Moynihan, expressed uncertainty about Buffett’s sell-off.

This stake sale comes more than a year after Warren Buffett publicly praised Bank of America and its CEO, Brian Moynihan.

Moynihan responded to questions regarding Buffett’s sell-off of the bank’s shares at a Barclays event, stating that he is uncertain about the reasons behind it. However, he acknowledged Buffett as a great investor who has provided stability to the company when needed. Moynihan also mentioned that the market is absorbing Buffett’s stock sale. It’s worth noting that Berkshire currently holds an approximately 11.1 percent stake in Bank of America, as per LSEG data.

Berkshire Hathaway, with its headquarters in Omaha, Nebraska, is the largest shareholder of Bank of America. Over the past few weeks, they have been gradually reducing their stake in the bank, with total share sales amounting to nearly $7 billion since July.

Financial analysts speculate that Berkshire’s motive for selling the stock is primarily for profit realization, rather than being driven by broader macroeconomic implications.

Christopher Marinac, the director of research at Janney Montgomery Scott, commented that the sale is a result of Berkshire capitalizing on the stock’s previous low value. He stated, “The Berkshire BofA sale is just profit taking after being opportunistic when the stock was much cheaper.”

Deutsche Bank analyst Matt O’Connor wrote speculating that Berkshire may aim to lower its stake just below the 10 percent reporting threshold to avoid regulatory scrutiny. Berkshire is required to report its sales to the SEC until its stake falls below 10 percent.

Michael Ashley Schulman, the Chief Investment Officer at Running Point Capital Advisors, believes that Buffett and Berkshire Hathaway might have trimmed their Bank of America stake to balance it proportionately after recently halving their stake in Apple. Schulman mentioned, “The investor is not commonly known for profit realization through sales, but he does occasionally realize upside.”

As of the latest trading session, Bank of America’s shares have seen a nearly 16 percent increase during the year 2024, closing at around $39.28 on Tuesday. However, in Wednesday’s trading, the bank’s stock experienced a decline of over 2 percent, reaching $38 per share.

Warren Buffett, at 94 years old, is widely recognized as one of the world’s most renowned investors. Berkshire Hathaway initially invested $5 billion in Bank of America in 2011 by purchasing preferred stock in the company.

This sell-off by Berkshire comes amidst a volatile period for the three major U.S. stock indexes. The Dow Jones, Nasdaq, and S&P 500 recently recorded their worst weeks in months, primarily influenced by weaker-than-expected jobs reports.

Over the past five days, the Dow has declined by more than 2 percent and, as of Wednesday morning, dropped over 500 points. Similarly, the Nasdaq has witnessed a 1 percent decrease since September 6.

Later in September, Federal Reserve policymakers are expected to convene and potentially vote on a cut to interest rates. Federal Reserve Chair Jerome Powell indicated last month that it was time for a cut, citing a cooling inflation rate and a less overheated labor market, among other factors.

Berkshire Hathaway has not yet responded to an Epoch Times request for comment.