Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) has been making waves in the financial world with its recent sale of Bank of America (BAC) holdings, bringing its total haul to nearly $9 billion over the last few months. This move has garnered attention as Berkshire has sold BofA stock in 10 of the past 11 weeks, raking in $8.9 billion in profits from the sales.
Despite the sell-offs, Berkshire still holds a 10.5% stake in the country’s largest bank. The decision to trim the stake in BofA has left many wondering about Buffett’s motivation for selling. Bank of America CEO Brian Moynihan recently addressed the situation at a Barclays conference, stating, “I don’t know what exactly he’s doing because, frankly, we can’t ask and we wouldn’t.”
The history between Buffett and Bank of America dates back to 2011 when Berkshire injected $5 billion into the struggling bank during the aftermath of the 2008-2009 financial crisis. This investment was not only a bet on the bank’s recovery but also a show of faith in CEO Brian Moynihan, who took over the top position in 2009.
Bank of America’s financial performance is still expected to shine in the near term, according to the latest guidance from CFO Alastair Borthwick. With rate cuts from the Federal Reserve potentially benefiting the bank as deposit costs decrease and a securities portfolio rebounds, BofA’s net interest income is projected to grow from the second quarter through the end of the year.
Overall, despite the uncertainty surrounding Berkshire’s recent sell-off of Bank of America stock, the financial outlook for the bank remains positive. Keep informed on the latest stock market news and events influencing stock prices by visiting Extreme Investor Network. Stay ahead of the curve with our in-depth analysis and stay tuned for the latest financial and business news.