Buffett’s Berkshire Hathaway Sells 9.5 Million Bank of America Shares, Stake Drops Below 10%

Warren Buffett’s Berkshire Hathaway has reduced its stake in Bank of America below 10%, selling 9.5 million shares worth $382.4 million, according to an October 10 regulatory filing. This significant move signals a potential shift in Berkshire’s long-term investment strategy, following similar stock sales earlier this year.

Buffett’s Berkshire Hathaway Reduces Bank of America Stake, Sparking Speculation on Investment Strategy Shift

Billionaire Warren Buffett's Berkshire Hathaway unloaded more Bank of America stock this week, bringing its stake in the U.S. banking giant below 10%. According to Reuters, this is a significant development, as it could signal a shift in Berkshire's long-term investment strategy.

According to a regulatory filing on October 10, Berkshire sold 9.5 million shares worth $382.4 million this week.

The U.S. Securities and Exchange Commission requires shareholders who own more than 10% of a company to disclose stock purchases and sales within two business days.

For Bank of America investors, the eagerly awaited Berkshire's quarterly financial reports or quarterly stock holdings disclosures will be crucial in determining the future of the Omaha, Nebraska-based company.

It started trimming the stake in mid-July when it sold about 33.9 million shares for around $1.48 billion. Till then, the investment giant had netted more than $10 billion.

BofA, however, is not the only stock that Buffett has dumped recently. Earlier this year, Berkshire halved its stake in technology behemoth Apple.

Buffett Cites Potential Capital Gains Tax Hike as Reason for Reducing Bank of America Stake

At Berkshire Hathaway's annual meeting in May, Buffett said selling made sense as the federal tax rate on capital gains could grow depending on who wins the U.S. presidential election. This is a significant concern for investors, as a higher tax rate could reduce their after-tax returns.

Buffett, an investment giant of immense influence, made his first foray into Bank of America in 2011. His purchase of $5 billion of its preferred stock was seen as a significant vote of confidence.

The bank and its peer Citigroup will report results next week. Investors will monitor the potential impact of higher deposit costs and tepid loan demand closely.