Warren Buffett Cuts Stake In Bank Of America To Below 10%

(RTTNews) - Billionaire investor Warren Buffett's Berkshire Hathaway Inc. has reduced its stake in Bank of America Corp. to below the key 10 percent regulatory threshold. With this, Berkshire is no longer required to report its related transactions frequently.

In a filing with the U.S. Securities and Exchange Commission, Berkshire disclosed the sale of around 9.54 million shares in total, in three transactions made between October 8 and 10.

With the sale, the company now holds 775 million shares of the banking major, representing a stake of about 9.99 percent.

As per the SEC's requirment, shareholders who own more than 10 percent of any company's stake are required to report related transactions within two business days.

Berkshire, which began a selling spree in mid-July, reportedly has gained about $10.5 billion so far from the stake sale in the bank.

In July, Berkshire sold about 33.9 million shares for around $1.48 billion.

Despite these sales, Berkshire remains Bank of America's biggest institutional investor.

It was in 2011 that Buffett's Berkshire bought $5 billion worth preferred stock and warrants in the bank. In 2017, these were converted to common stock, making Berkshire the largest shareholder in the bank. In 2018 and 2019, Buffett reportedly bought 300 million more shares.

The news comes as the bank is preparing to report its third-quarter results next week. The company has been reporting weak earnings in the past few quarters.

Among other major company invetments, Berkshire reportedly sold nearly half of its stake in Apple Inc. in August, immediately following the release of the tech major's quarterly results, citing China risk. The sale resulted in Berkshire divesting around 390 million Apple shares, equivalent to a net value of $75.5 billion. Consequently, Buffett's cash reserves increased to about $276.9 billion.

In May also, Berkshire had trimmed a portion of its significant stake in Apple, reportedly citing tax reasons.

Despite the significant divestment, Berkshire still holds around 400 million Apple shares valued at $84.2 billion.