Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) topped $1 trillion in market cap for the first time on Wednesday as it continues to sell off some of its holdings in Bank of America (BAC).
Berkshire Hathaway is the first company outside of the technology industry to reach this monopoly zone in the United States; it currently includes only six other companies.
The move came after Berkshire disclosed late Tuesday that it had reduced its holdings in the second-largest U.S. bank by another 24.6 million shares, generating $982 million.
Berkshire has sold Bank of America shares in five of the past six weeks since mid-July, netting a total of 129 million shares and making a profit of $5.4 billion.
Bank of America shares have fallen more than 9% during Buffett’s selling spree, but are still up about 18% this year, lagging bigger gains at rivals Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C).
Bank of America shares rose more than 1% in morning trading Wednesday.
Berkshire has not yet said why it is selling part of its stake in Bank of America, although it remains the bank’s largest shareholder, with more than 900 million shares worth more than $35 billion.
Buffett’s latest move is noteworthy because of his long association with the bank, injecting $5 billion into it in 2011 as the bank struggled to recover from the fallout from the subprime mortgage collapse that led to the 2008-2009 financial crisis.
It was a bet not just on Bank of America’s recovery but also on the new leadership of Brian Moynihan, who became CEO in 2009.
Warren Buffett, left, and Bank of America CEO Brian Moynihan, right, at a Georgetown University event in 2013. (Drew Ungerer/Getty Images) (Drew Ungerer via Getty Images)
Buffett’s backing has certainly helped restore some market confidence in the bank, whose shares have risen nearly 400% since then.
Buffett continued to invest in Bank of America even as he began selling off shares in other large financial institutions.
Between 2018 and 2022, he sold huge stakes in JPMorgan, Wells Fargo (WFC), and Goldman Sachs, some of which came just months before the major disruption to the banking system that began in mid-March 2023.
Buffett began selling his shares in Wells Fargo after a series of scandals rocked the bank, including revelations that employees under pressure to meet sales targets opened millions of accounts customers didn’t want and charged them unnecessary fees.
“We’ve been very careful about our bank ownership and intend to stick with one bank. I like Bank of America and its management team,” Buffett said at Berkshire’s annual meeting in May 2023.
By June of this year, Bank of America accounted for 15% of Berkshire Hathaway’s portfolio, and the company had reduced its holdings in Apple (AAPL).
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This currently ranks the company’s third-largest position behind Apple and American Express (AXP).
David Hollerith is a senior reporter at Yahoo Finance covering banking, cryptocurrency and other areas of finance.
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