Buffett continues to sell nearly $900M in Bank of America (BAC.US) shares, recouping all of his investment cost
1min read As Warren Buffett continues to sell Bank of America Corp. (BAC) shares, the investing legend known as the "Oracle of Omaha" has now recouped his entire investment cost in the stock and is sitting on a profit of more than $34 billion in the bank's shares.
Berkshire Hathaway (BRK.A) sold $896 million of Bank of America shares this week, according to a filing on Thursday. That means, if not for tax effects, Buffett's total proceeds from selling Bank of America shares since mid-July, plus dividends received since 2011, have surpassed the $14.6 billion he spent buying the bank's shares.
Buffett, 94, bought the bank's preferred stock and warrants for $5 billion in 2011, establishing his investment in the bank. Six years later, after the bank raised its dividend, he converted those shares into common stock. During his investment period, Bank of America's stock price has soared.
Berkshire did not respond to a request for comment.
After the latest sale, Berkshire's stake in Bank of America could soon fall below the 10% regulatory threshold that requires it to disclose trades within a few days. Once Buffett's control falls below that level, trades in the stock may not be disclosed for weeks — usually only quarterly.
For years, Buffett has been adding to his position in Bank of America and praising the bank's leadership, but he has not publicly explained his decision to sell shares. Comments could be complicated because U.S. regulators don't want major shareholders of major banks to have influence over the banks.
At the Barclays Global Financial Services conference on Sept. 10, Bank of America CEO Brian Moynihan said he couldn't call Buffett directly and ask "what he's doing because frankly, we can't ask and we won't ask."
But Moynihan added: "The market is absorbing these shares. It's part of the day-to-day — life will go on."