Despite this reduction, Bank of America remains a key investment for Berkshire Hathaway, with the conglomerate owning 999 million shares valued at almost $43 billion. This stake represents roughly 10.8% of the bank, making Berkshire the largest shareholder. The bank’s shares have jumped by 27.4% this year, reaching their highest prices since March 2022. Comparatively, Berkshire’s decision follows similar actions regarding its stake in Apple earlier this year, where Buffett cut its holding by 13% for tax reasons after significant gains.
Warren Buffett’s initial investment in Bank of America dates back to 2011 when he purchased $5 billion in preferred stock during a challenging period for the bank, which was dealing with losses from the subprime mortgage crisis. Buffett disclosed that he got the idea for the investment while relaxing in his bathtub, emphasizing the unique circumstances that led to what has become one of the memorable stories on Wall Street. As his connection with the bank deepened under CEO Brian Moynihan’s leadership, the investment has proved fruitful over the years, allowing Berkshire to capitalize further even as it now chooses to scale back its holdings.
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