Buffett has reduced his holdings in Bank of America again! Multiple reductions in holdings to cash out over billions of dollars
白云追月素
发表于 2024-10-18 20:36:04
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[Introduction] Continuously reducing holdings! Buffett cashed out approximately $370 million again
On October 18th local time, the US Securities and Exchange Commission (SEC) disclosed documents showing that Berkshire Hathaway, owned by the "stock god" Warren Buffett, sold 8694538 shares of Bank of America stock at an average price of $42.5472 per share on October 15th, cashing out $369.9 million.
[align center] (Source: SEC official website)
Multiple reductions in holdings to cash out over billions of dollars
Shareholding ratio drops below the critical threshold of 10%
Buffett's reduction of holdings in Bank of America has been ongoing for some time.
The disclosed reduction this time is already Buffett's 16th round of reduction in Bank of America since mid July this year. According to statistics, Buffett has cumulatively cashed out over $10 billion.
After this round of reduction, Berkshire Hathaway's stake in Bank of America has dropped to 775 million shares, with a shareholding ratio of 9.97%, below the critical threshold of 10%.
According to the relevant regulations of the US SEC, if the shareholding ratio of a company exceeds 10%, the transaction involved must be disclosed within 2 working days; If the shareholding ratio does not exceed 10%, there is no need to disclose the trading situation as soon as possible, and it can be disclosed in the subsequent quarterly reports. This means that if Buffett sells Bank of America stocks again, the market will not be able to know so quickly.
Buffett first invested in Bank of America in 2011, when he purchased $5 billion worth of preferred stock and warrants to boost market confidence during the subprime crisis. In 2017, Buffett converted stock warrants into common stock, making Berkshire Hathaway the largest shareholder of Bank of America. In 2018 and 2019, Berkshire Hathaway continued to buy more Bank of America stocks.
Previously, Buffett seemed to have always favored Bank of America. According to the 13F submitted by Berkshire Hathaway, as of June 30th of this year, Bank of America is the third largest holding of Berkshire Hathaway, followed by Apple and American Express.
Buffy's massive reduction in holdings has attracted market attention
Buffett's sell-off of Bank of America has made many of the bank's shareholders uneasy, especially in the current uncertain economic outlook in the United States, where the market is still concerned about the possibility of a recession.
This year, in addition to reducing its holdings in Bank of America, Berkshire Hathaway has also significantly reduced its holdings in Apple stocks. In the first half of this year, Berkshire Hathaway conducted its largest ever stock sell-off in the second quarter, reducing its holdings of Apple Inc. by about half (55%). This has increased Berkshire Hathaway's cash reserves to $276.94 billion as of the end of June.
Gabelli Funds portfolio manager Macrae Sykes believes that 'when one of the most representative investors in the United States starts selling stocks, it triggers market panic'.
As for the reason for the sell-off, Buffett has never provided a specific explanation. He has only previously stated that part of the reason for selling stocks of companies such as Apple and Bank of America is that he believes the corporate tax rate will rise after the current tax laws expire at the end of next year.
Analysts believe that Buffett is highly likely to continue his' silent 'reduction in Bank of America after reducing his holdings to less than 10%. In addition, it is worth noting that Buffett has also started to reduce his holdings of Wells Fargo since 1989 in recent years. In addition, it currently retains approximately $3.5 billion in Citibank holdings in its investment portfolio.
The market is also curious about where Buffett, who holds a large amount of cash, is heading next.
Industry insiders have analyzed that Berkshire Hathaway launched a yen denominated bond offering worth up to 263.3 billion yen in April, which is the largest fundraising plan for the investment company since 2019. On October 10th, Berkshire Hathaway confirmed the issuance of yen denominated bonds with a total amount of 281.8 billion yen. This brings the total amount of yen denominated bonds issued by Berkshire Hathaway in 2024 to 545.1 billion yen, surpassing the 430 billion yen issued in 2019 for the first time and setting a new historical high.
Berkshire Hathaway stated in its customary "Open Letter to Shareholders" released in February 2024 that the vast majority of its investment positions in Japan are funded through corporate bonds. This has led the market to speculate that the bonds issued this time will also be used to invest in Japanese stocks.
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Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
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