Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) continued to sell some of its holdings in Bank of America (BAC) on Wednesday, pushing its market cap above $1 trillion for the first time.
Berkshire was the first company outside the technology industry to reach exclusive territory in the United States, which currently includes only six other companies.
The move came after Berkshire revealed late Tuesday that it had cut its stake in the nation’s second-largest financial institution by an additional 24.6 million shares, generating $982 million.
Berkshire has sold BofA stock in five of the past six weeks since mid-July, releasing a total of 129 million shares and earning $5.4 billion on the sale.
Bank of America’s stock price fell more than 9% on Buffett’s selling spree. It’s still up about 18% so far this year, trailing big gains by rivals Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C).
BofA stock rose more than 1% in Wednesday morning trading.
Berkshire has not yet said anything about its motivations for selling part of its Bank of America stake. It is the bank’s largest shareholder, owning more than 900 million shares worth more than $35 billion.
The recent move is noteworthy because of Buffett’s long history with the bank. He injected $5 billion into Bank of America in 2011 as the bank struggled to overcome the remnants of the subprime housing meltdown that sparked the 2008-2009 financial crisis.
It was a bet not only on Bank of America’s recovery but also on new leadership from CEO Brian Moynihan, who took over the top job in 2009.
Warren Buffett (left) and Bank of America CEO Brian Moynihan attend a Georgetown University event in 2013 (Drew Angerer/Getty Images) (Drew Angerer via Getty Images)
Buffett’s support certainly helped restore some market confidence in banks. Since then, the company’s stock price has increased nearly 400%.
Mr. Buffett stuck with Bank of America even as he began unloading stakes in other major financial institutions.
Between 2018 and 2022, he exited the giant holdings of JPMorgan, Wells Fargo (WFC), and Goldman Sachs, but this was in the months leading up to the banking system’s upheaval that began in mid-March 2023. It was before.
Buffett said a series of scandals have rocked the bank, including revelations that employees under pressure to meet sales targets opened millions of accounts that customers did not want and charged unnecessary fees. After that, he started giving up his position at Wells Fargo.
Buffett said at Berkshire’s annual shareholder meeting in May 2023: “We’re very cautious about bank ownership. We stay with one bank…I like Bank of America, and I like the management. I also like the team,” he said.
By June of this year, Bank of America accounted for 15% of Berkshire’s portfolio as Berkshire shed its Apple (AAPL) stake.
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The company currently ranks third behind Apple and American Express (AXP).
David Hollerith is a senior reporter at Yahoo Finance, covering banking, cryptocurrencies, and other financial areas.
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