Berkshire Hathaway made a surprising move recently by trimming its massive Bank of America holding for the first time in over four years. This decision came after the bank’s strong performance in 2024. Warren Buffett’s conglomerate sold 33.9 million shares of Bank of America in separate transactions, totaling almost $1.5 billion. The average selling price of these shares was $43.56. This marks the first time since the fourth quarter of 2019 that Berkshire Hathaway has reduced its stake in the bank. Despite this reduction, Bank of America still remains Berkshire’s second-largest equity position, with almost 999 million shares valued at approximately $43 billion. Additionally, Berkshire continues to be the largest shareholder of Bank of America, holding a 10.8% stake in the company.
One possible reason for Berkshire Hathaway’s decision to trim its Bank of America position could be to take profits as the bank’s stock has seen a significant rally of 27.4% so far in the year, reaching its highest levels since March 2022. In the first quarter, Buffett also trimmed Berkshire’s Apple holding by 13% for tax purposes after substantial gains. The slight dip in Bank of America’s shares on Monday following this news indicates that investors are closely monitoring Buffett’s investment decisions.
Warren Buffett’s purchase of Bank of America shares has become a legendary story on Wall Street. In 2011, he invested $5 billion in the bank’s preferred stock and warrants during a time when the lender was facing challenges related to losses from subprime mortgages in the aftermath of the financial crisis. Buffett famously revealed that he came up with the idea to invest in Bank of America while taking a bath. The simplicity of this decision-making process adds to the charm of Buffett’s investing style.
Buffett’s attraction to Bank of America was not just a spur-of-the-moment decision. He was impressed by CEO Brian Moynihan’s leadership and the profitability of the bank’s franchise. Despite initial hurdles in communication, including being rejected by the bank’s call center, the deal between Buffett and Bank of America came together swiftly. This anecdote highlights Buffett’s ability to spot opportunities where others may not, ultimately leading to successful investments.