On September 11th, Caixin reported that Warren Buffett, known as the "stock god", has been selling a large amount of Bank of America stocks since mid July, but the selling speed has begun to slow down.
According to a latest regulatory filing on Tuesday (September 10th), Berkshire Hathaway sold nearly 5.8 million shares of Bank of America stock worth $229 million in the three trading days ending on Tuesday (September 6th, 9th, and 10th).
It is worth mentioning that the average trading price on Tuesday was $39.30 per share, which is one of the lowest prices since he initially reduced his holdings of Bank of America stock in July.
Buffett's current round of reduction began on July 17th, and since then, he has cashed out nearly $7.2 billion.
As of now, Berkshire Hathaway remains the largest shareholder of Bank of America, with a stake of approximately 11%. However, if Buffett continues to sell shares in the bank, Berkshire's holdings in the US dollar are likely to fall below 10%.
What does 10% mean? This is a regulatory threshold, and if it falls below this threshold, Berkshire Hathaway will no longer need to disclose trading information within two working days as it currently does. It is worth mentioning that Buffett himself prefers to buy and sell stocks without quick public disclosure.
Bank of America CEO: I don't understand either
On Tuesday (September 10th), Brian Moynihan, CEO of Bank of America, talked about Buffett's continuous selling of Bank of America stocks. He first praised Warren Buffett as a great investor, but then stated that he did not ask the legendary investor why he kept reducing his holdings of Bank of America stocks.
Moynihan mentioned at an investor conference in New York, "Buffett has always been a great investor in our company, stabilizing it. But I don't know exactly what he's doing, because frankly, we can't ask
Moynihan also discussed a proposal to modify capital rules at the meeting, responding to a proposal by Federal Reserve Chairman Powell.
On Tuesday, Powell proposed to change the capital increase requirement for large banks to 9%, while previously, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Superintendent of the Currency had initially requested eight systemic banks to increase their capital by 19%, which sparked strong opposition from various banks on Wall Street.
Moynihan pointed out that the proposed reforms are controllable for Bank of America, which will continue to repurchase stocks. However, he also warned that increasing capital requirements for large banks may reduce the issuance of loans. "If our capital (requirements) increase by 10%, we will not be able to issue the $160 billion in loans that could have been issued. These loans will be issued to small and medium-sized enterprises at competitive interest rates
When talking about the third quarter performance, Moynihan said that its investment banking revenue may be around $1.2 billion, slightly higher than the $1.18 billion in the same period last year.