Billionaire Warren Buffett’s Berkshire Hathaway has increased its selling pressure on American bank stocks, having sold over $3.8 billion worth of stock in the past 12 consecutive days.
According to Reuters, a regulatory filing submitted by Berkshire on Thursday, August 1st, revealed that the company sold around 19.2 million shares of American bank stock, cashing out $779 million from July 30th to August 1st.
Since July 17th, Buffett’s conglomerate has reduced its stake in American bank stocks by a total of 90.4 million shares over 12 consecutive trading days. However, as of Thursday, Buffett remains the largest shareholder of the second-largest bank in the U.S., holding 942.4 million shares, which represents 12.1% of the total issued shares of the bank and is valued at around $37.2 billion.
The stock price of American bank dropped sharply by 4.3% in early Friday trading. Since Berkshire began selling in mid-July, the stock has fallen by over 10% as of Thursday.
Prior to this significant selling activity, the stock of American bank had risen by approximately two-thirds since the end of October last year, with a trading price exceeding 1.2 times its book value.
This has driven the value of Berkshire’s holdings to over $45 billion, more than twice the $14.6 billion initially paid for the stocks when purchased by the company.
Berkshire will continue to report its selling activities until its stake falls below 10%. The company is set to release its second-quarter financial report on Saturday morning.
The 93-year-old Buffett is one of the most respected investors in the world and has been investing in American bank since 2011, when Berkshire acquired $5 billion of preferred stock.
That purchase demonstrated Buffett’s confidence in Bank of America CEO Brian Moynihan, believing in his ability to restore the bank’s operations to good health following the 2008 financial crisis.
In April 2023, Buffett expressed his strong liking for Moynihan during an interview with CNBC, stating that he was “very” fond of him and had no intention of selling the bank’s stock at that time.
Berkshire Hathaway, headquartered in Omaha, Nebraska, operates various businesses including Geico’s car insurance, BNSF’s railway, and several other insurance, energy, industrial, and retail operations.