Warren Buffett’s investment giant, Berkshire Hathaway, has been steadily selling off shares in Bank of America, raising nearly $9 billion over the past few months. On Tuesday, the company revealed it had sold an additional 21.6 million shares, pocketing a tidy $862.7 million in profits.
Since mid-July, Berkshire has sold BofA stock in 10 of the past 11 weeks, offloading a whopping 218.5 million shares. Yet, despite this flurry of sales, Buffett’s firm still holds a significant 10.5% stake in one of America’s largest banks, worth more than $32 billion.
Why is the “Oracle of Omaha” selling? So far, Buffett and Berkshire have remained tight-lipped, and Bank of America CEO Brian Moynihan admits he doesn’t know either. However, he praised Buffett’s steady hand, remembering the crucial $5 billion investment Berkshire made in 2011 during the aftermath of the financial crisis.
Bank of America, despite these sales, is still performing well, up 16% so far this year, though lagging behind competitors like Goldman Sachs and JPMorgan Chase. Rate cuts from the Federal Reserve could work in its favour, with lower deposit costs and improved revenue streams expected by the year’s end.
Buffett’s recent move may raise questions, but one thing’s for sure: his influence on Bank of America remains immense.
