Investing.com — Warren Buffett's Berkshire Hathaway (NYSE:) sold a roughly $900 million portion of its stake in Bank of America this week, reducing its holdings in the second-largest U.S. lender to a key reporting threshold.
Berkshire's stake in Bank of America currently amounts to 10.8% of the shares outstanding, or about $34 billion. Berkshire, which remains one of Bank of America's largest shareholders, will have to continue to report its holding periodically as long as its stake is above 10%.
Last week, the Omaha, Nebraska-based group disclosed a sale of about 5.8 million Bank of America shares between Sept. 6 and Sept. 10.
Buffett has not publicly explained why Berkshire has been reducing its stake in Bank of America, though he has praised the company in the past. The billionaire investor first bought $5 billion worth of preferred stock and warrants in the bank in 2011. He converted that stake into common stock several years later when Bank of America announced a dividend increase.
Berkshire's proceeds from sales of Bank of America stock that began in July, as well as dividends since 2011, have now surpassed the $14.6 billion in investments the conglomerate has made in the bank, according to Bloomberg News calculations. The calculations do not include the impact of taxes, Bloomberg noted.
Asked recently about Berkshire's divestments, Bank of America CEO Brian Moynihan said he was not in a position to speak with Buffett about the matter.
“I don't know exactly what he's doing because, frankly, we can't ask,” Moynihan said at a financial conference in New York last week. He did, however, describe Buffett as a “great” investor for the bank.
Analysts cited by Reuters suggested that Berkshire may be trying to reduce its holdings below the 10% threshold to avoid regulatory scrutiny. Once under its control below that level, Berkshire could choose to disclose its stake in Bank of America less frequently and possibly only in its quarterly updates, Bloomberg reported.
(Reuters contributed to this report.)
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