Warren Buffett's Berkshire Hathaway Inc. sold about 34 million shares of Bank of America Corp. (BAC.US) for $1.48 billion in its latest transaction, according to the latest public filing. Despite the sale, Berkshire Hathaway still owns more than 9.98 billion shares of the bank worth more than $42 billion, making it the largest shareholder. It's worth noting that Bank of America shares have risen 7.9% so far this month.
In 2011, Mr. Buffett invested $5 billion in the bank, gaining preferred shares and the right to buy common stock. The investment not only gave the bank confidence after the financial crisis, but also quieted the market's concerns about its capital adequacy. The bank's stock price then soared, bringing huge book gains to Berkshire Hathaway.
Mr. Buffett not only exercised these rights to increase his stake, but also increased his ownership by buying more shares, eventually becoming one of the largest shareholders. The long-term investment strategy of the investing legend also reflects his strong belief in the management of Brian Moynihan, the bank's chief executive.
Mr. Buffett's series of actions not only reflect his confidence in the bank's financial health and future prospects, but also in its management team. Despite the partial sale, Berkshire Hathaway's stake in the bank remains significant, showing Mr. Buffett's continued confidence in the bank's long-term value.