Warren Buffett Lowers Stake in Bank of America Below 10%, Trade Updates May Slow to Quarterly Reports

Warren Buffett, known as the “Oracle of Omaha,” has gradually reduced his stake in Bank of America Corporation throughout this year, cutting it to just below 10%. This move allows his company, Berkshire Hathaway, to potentially slow the frequency of its disclosures regarding Bank of America stock trades, as it is no longer required to meet the same strict reporting regulations for holdings above 10%, according to a Bloomberg report.

Since mid-July, Warren Buffett has been selling portions of Berkshire Hathaway’s shares in Bank of America, collecting approximately $10.5 billion from his long-standing investment in the bank. The total holding has now been reduced to 9.99% of the bank’s outstanding shares, meaning that Buffett may now disclose future trades on a quarterly basis, rather than within a few days, as was previously required by U.S. regulations for larger shareholders. As a result, fellow investors might not learn about additional sales for months if Buffett decides to sell more shares.

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The change in the disclosure timeline could ease concerns that have been weighing on investors. Analysts believe this may remove a psychological barrier and help Bank of America’s stock regain some momentum. Piper Sandler analyst Scott Siefers noted that dropping below the 10% ownership threshold could give the stock a boost.

Bank of America’s stock performance has been affected during this period of stock sell-offs. Earlier this year, as of mid-July, the bank had been one of the top performers in the KBW Bank Index, a 24-company index that tracks the largest U.S. banks. Since then, it has dropped to become the second-worst performer. In the most recent selling round, Berkshire Hathaway offloaded $382.4 million worth of Bank of America shares over three days.

At 94 years old, Buffett has not commented on his reasons for reducing Berkshire Hathaway’s stake in Bank of America. His endorsement had been seen as a strong sign of support for Bank of America CEO Brian Moynihan. Buffett’s firm first invested $5 billion into the bank in 2011 during a challenging period for the financial industry. In 2019, Berkshire Hathaway even sought approval from the Federal Reserve to increase its stake in the bank beyond the 10% mark.

Despite the recent sales, Berkshire Hathaway remains Bank of America’s largest shareholder, with a stake currently valued at around $31 billion, based on Thursday’s closing stock price. The share sales this year have already allowed Berkshire to recover more than what it initially invested in the bank.