Warren Buffett just dumped $337 million of this stock

Warren Buffett and his Berkshire Hathaway (NYSE: BRK.A, BRK.B) offloaded another $337.9 million worth of Bank of America (NYSE: BAC) shares in three separate sales between September 30 and October 2.

The first—and largest—sale occurred on the final day of the third quarter (Q3) of 2024. It witnessed the selling of 4.95 million at an average price of about $39.61, for a total value of $197 million.

The two subsequent divestments – on the first and second day of October – were substantially smaller, at about 1.8 million and 1.7 million shares, respectively, and they raised $72.4 million and $67.8 million.

Despite the massive volume within just a few days, there was little variance in the price the stock was sold at, and the three trades were all executed at between $39.39 and $39.61.

Warren Buffett on a BAC stock selling spree

The three trades on the borders between September and October follow what many have described as Warren Buffett’s selling spree. 

Indeed, ‘The Oracle of Omaha’ began selling large amounts of Bank of America shares in late July, and the first month of trading was enough for Buffett to raise $4.36 billion from BAC stock.

The subsequent divestment continued at reduced but still major volumes.

Berkshire Hathaway, for example, reported selling $981.9 million worth of shares in late August, $760 million in early September, and $230 million near the middle of the ninth month.

Additionally, by September 17, ‘The Oracle of Omaha’ was reported as having made some $7 billion in two months from offloading BAC stock and has brought his total cash pile to about $280 billion.

Still, it is worth pointing out that even after the selling, Warren Buffett remains a 10% owner of Bank of America and still holds just over 720 million BAC shares.

Why is Warren Buffett selling BAC shares?

By press time on October 3, there is no clear indication of the reason behind Buffett’s decision to increase his cash pile at the expense of his BAC stock position.

Indeed, the billionaire has yet to comment on the activity, and Bank of America, according to a September 10 statement of its CEO, Brian Moynihan, is equally in the dark:

I don’t know what exactly he’s doing because, frankly, we can’t ask, and we wouldn’t ask, but on the other hand, the market is absorbing the stock, and it’s a portion of the volume every day, and we’re buying the stock, a portion of the stock, and so life will go on.

Nonetheless, the selling has been fertile ground for speculation. On the one hand, it appears to be a part of a wider Berkshire Hathaway trend of reducing exposure to the U.S. banking sector.

In fact, Buffett has either erased or significantly reduced his stake in a large variety of banks, including Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM), Wells Fargo (NYSE: WFC), U.S. Bancorp (NYSE: USB), and BNY Mellon (NYSE: BK) since 2020.

The selling also comes at a time when most major stock market indices are near all-time highs (ATH) and expected to correct at least somewhat due to election-driven volatility. 

In fact, Fundstrat’s Tom Lee has recently opined that October and November could provide significant ‘buy the dip’ opportunities. If such analysis proves correct, Buffett’s accumulation of cash could be interpreted as gathering of funds for buying the said dip.

Ultimately, however, only time will tell what has driven Berkshire Hathaway to raise large amounts of cash and why BAC stock was chosen for the chopping block.

Bank of America stock price chart

Whatever the famous investor’s reasons may be, the selling spree has done relatively little to affect Bank of America’s shares. Since January 2, the stock has risen 15.07% and BAC price today, at press time, stands at $39.01.

Finally, despite the stock being in the green in the longer time frames and has mostly recovered from the July drop, the most recent trends offer some cause for concern. BAC shares are 4.15% down in the last 30 days, and 0.76% in the last full week of trading.