Recently, Warren Buffett, the CEO of Berkshire Hathaway, has made headlines again by selling over 9.5 million shares of Bank of America (BofA). This recent transaction has brought Berkshire’s stake in BofA below the 10% threshold, meaning they are no longer required to report any further holdings changes within two business days. This change allows Berkshire to keep its forthcoming adjustments concerning BofA shares under wraps.
On October 10, Berkshire filed with the U.S. Securities and Exchange Commission (SEC) indicating that between October 8 and 10, they sold over 9.5 million shares of BofA at an average price of $40 per share. This sale marks the 18th consecutive trading day of reducing their BofA stake, which has now fallen to 775 million shares valued at $31 billion, lowering their ownership percentage to 9.987%.
If Berkshire decides to sell additional shares of BofA, they won’t need to disclose that trade publicly within two business days. This could provide a measure of relief to BofA shareholders, as they won’t have to worry about sudden stock adjustments from Buffett, often referred to as the “Oracle of Omaha.” Piper Sandler analyst Richard D. Weiss noted that with Berkshire’s stake now below 10%, it could alleviate some psychological barriers for investors, potentially allowing BofA to regain some upward momentum.
Berkshire is scheduled to submit its 13F filing in mid-November, which will reveal their holdings as of the end of September. Nevertheless, since the third quarter, BofA has been conducting share buybacks, which could mean that Berkshire’s ownership percentage might soon tick back above the 10% mark. It’s important to note that Berkshire remains the largest institutional shareholder in Bank of America.
The key question now is whether Buffett will continue to sell BofA shares. Barron’s points out that Buffett traditionally favors round share numbers, and with Berkshire’s current holding at exactly 775 million shares after 15 rounds of stock reductions since mid-July, he may choose to pause further sales for the time being. However, there are speculations that Berkshire could continue to trim its BofA holdings down to as low as 700 million shares.
