WARREN Buffett’s Berkshire Hathaway sold more Bank of America shares, boosting sales to more than US$3 billion this month, taking profits after a big run-up in the second-largest US bank’s stock price.
Berkshire sold 18.4 million of the bank’s shares for US$767 million between Jul 25 and Jul 29, according to a Monday (Jul 29) night regulatory filing.
It has sold 71.2 million Bank of America shares for US$3.05 billion since Jul 17, reducing its holdings in the Charlotte, North Carolina-based lender by 6.9 per cent to 961.5 million shares.
Buffett’s conglomerate still has an approximately 12.4 per cent stake in Bank of America, worth US$39.5 billion as of Monday’s close. It must report sales until the stake falls below 10 per cent.
Berkshire did not immediately respond to a request for comment on Tuesday, while Bank of America declined to comment.
Bank of America’s stock price has risen by nearly two-thirds since late October. The stock trades at 1.2 times book value, after trading below book value for most of the last decade.
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Buffett has long supported the leadership of Brian Moynihan, the bank’s chief executive since 2010.
Berkshire bought US$5 billion of Bank of America preferred stock in 2011, when some investors worried if the bank would have enough capital after cleaning up huge mortgage and legal liabilities from the 2008 financial crisis.
Buffett swapped the preferred stock for common stock in 2017 after exercising warrants, and ultimately spent US$14.6 billion on Bank of America shares. Those shares were worth more than US$45 billion when Berkshire’s selling began.
Berkshire has also been selling Apple, shedding about 115 million shares in the first quarter.
It may disclose more Apple sales when it releases second-quarter results, expected on Saturday.
Buffett said at Berkshire’s May four annual meeting that he expected the iPhone maker to remain Berkshire’s largest stock investment, but selling made sense because the 21 per cent federal tax rate on gains would likely grow.
Berkshire is based in Omaha, Nebraska. Its dozens of businesses include Geico car insurance and the BNSF railroad. REUTERS
