Warren Buffett’s Berkshire Hathaway has turned a significant profit from its investment in Bank of America Corp., with the billionaire’s remaining stake valued at over $34 billion now classified as pure profit, Bloomberg reports.
This comes after the conglomerate’s recent sales of bank shares, which have effectively covered the initial investment costs.
In a filing disclosed Thursday, Berkshire Hathaway sold $896 million worth of Bank of America stock this week. Since mid-July, the total proceeds from these share sales and dividends collected since 2011 have exceeded the $14.6 billion that the company originally invested in the second-largest US bank.
Buffett made the initial $5 billion investment in 2011, acquiring preferred stock and warrants. He converted this stake into common shares six years later after Bank of America increased its dividend, resulting in a significant appreciation in stock value over the years.
It’s important to note that Bloomberg’s calculations do not account for taxes on these profits. Additionally, as Berkshire Hathaway’s ownership in Bank of America approaches the 10% regulatory threshold, which mandates prompt disclosure of transactions, the company may soon be able to delay revealing its trades.
Despite having previously expressed confidence in Bank of America and its leadership, Buffett has not publicly commented on his recent decision to reduce his holdings. At the Barclays Global Financial Services Conference on September 10, Bank of America CEO Brian Moynihan noted that he cannot inquire directly about Buffett’s actions, but acknowledged that the market is accommodating the stock’s volume effectively.
