Buffett has sold Bank of America again.
In the latest round of selling, Buffett's Berkshire Hathaway sold about 18.75 million shares of Bank of America stock, worth approximately $760 million. In addition, Buffett sold nearly half of his holdings in his top heavy stock, Apple, in the second quarter, causing market concerns with such a significant sell-off.
Sell for another $760 million
According to documents disclosed by the US Securities and Exchange Commission on the evening of September 5th local time, Berkshire Hathaway sold approximately 18.75 million shares of Bank of America stock between September 3rd and September 5th, with an average selling price of approximately $40.55 per share and a total value of approximately $760 million. On Thursday local time, Bank of America fell 0.89% to close at $40.14. Affected by the sell-off, the company's stock price has continued to decline, dropping about 10% from its July high.
Buffett has been selling Bank of America stocks since mid July and has reduced his holdings by nearly $7 billion. However, he still holds over 863 million shares of Bank of America stocks, with a value of approximately $34.7 billion based on the latest closing price.
As a shareholder holding more than 10% of the shares, Berkshire Hathaway must report its stock transactions within two days. If Berkshire chooses to continue selling, its stake in Bank of America may fall below the regulatory threshold of 10%, which means its subsequent operations with Bank of America may not be quickly disclosed, but will be revealed in the next quarterly report.
Earlier, Barron's Weekly reported that Buffett may stop selling when he reaches 700 million shares, which is the original number of shares Berkshire Hathaway held when it first invested in Bank of America in 2017.
Market speculation selling motivation
Not only Bank of America has been reduced by the "stock god". Berkshire Hathaway's Q2 US stock holdings report shows that the company directly halved its Apple holdings, reducing its holdings from 790 million shares to 400 million shares. As of the end of the quarter, the market value of its holdings was $84.2 billion.
Apple and Bank of America are Berkshire Hathaway's largest and second largest holdings, respectively, and this sell-off has raised concerns in the market.
In an analysis article, Doug Cass, a columnist for TheStreet Pro, stated that "selling 'long-term holding' stocks like Apple and Bank of America is not in Buffett's style." Cass said that the sell-off may reflect Buffett's pessimistic view of the US economy and market.
However, Haruki Toyama, portfolio manager and head of the mid to large cap stock team at Madison Investments, stated in an interview with Fortune magazine that he does not believe Buffett's stock sell-off is a clear market bearish signal. He said, "Buffett is just examining his own stocks and reducing them when he thinks they are expensive, but he doesn't necessarily feel the need to reinvest
Toyama also believes that Berkshire Hathaway's cash raising efforts should not be completely ignored, as the company's cash reserves have continued to expand in recent quarters, which may be a sign that Buffett and the company believe the stock is slightly overvalued.
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