Warren Buffett can take his time to reveal trades Bank of America Corp.’s stock now prompts a quick disclosure that its conglomerate’s stake is reduced below the regulatory threshold of 10%.
It has been helped by a sales spree that started in mid-July Berkshire Hathaway Inc. receives about $10.5 billion from massive year-long investments in the bank, reducing its stake to 9.99% of the lender’s outstanding shares.
Through 15 rounds, US rules required Buffett to disclose trades every few days. But a regulatory filing Thursday shows the stake is small enough that Buffett can offer quarterly updates, potentially leaving shareholders in the dark for months if he sells more.
That may calm the drama that continues to weigh on investors’ minds.
“At the very least, we suspect that this holding below 10% would lift a psychological barrier and allow stocks to regain some momentum going forward.” Piper Sandler analyst Scott Siefers wrote in a note earlier this month.
Shares of Bank of America rose sharply on Friday, rising 5.2% to $42.04 at 2:00 pm in New York, the biggest advance in nearly three months.
Berkshire’s stake could still rise more than 10% on Tuesday, when Bank of America reports third-quarter results and updates its share count. In July, the Charlotte, North Carolina-based lender announced plans to repurchase $25 billion of its stock.
Bank of America shares have underperformed during the settlement. It was ranked No. 1 in the 24-company KBW Bank Index as of July 16 this year. Since then, it has been the second worst. In the latest round, Berkshire unloaded $382.4 million in three days.
Buffett, 94, has not commented on why he is pulling back from the investment, which long ago gave its thumbs up to Bank of America CEO Brian Moynihan. The Omaha, Nebraska-based billionaire’s conglomerate put $5 billion into the bank in 2011. In 2019, it sought approval from the Federal Reserve to increase its stake above 10%.
Berkshire remains the bank’s largest shareholder, with a stake of about $31 billion based on Thursday’s closing price. This year’s disposals have already helped the conglomerate recoup more than it paid to acquire the holding.
