Warren Buffett’s Berkshire Hathaway (BRK-A) (BRK-B) surpassed a market cap of $1 trillion for the first time on Wednesday as the company continues to sell some shares in Bank of America (BAC).
Berkshire is the first company outside the technology world to reach this exclusive territory in the United States, which currently includes only six other companies.
The move came after Berkshire announced late Tuesday that it had reduced its stake in the country’s second-largest bank by another 24.6 million shares, raising $982 million.
Since mid-July, Berkshire has sold BofA shares in five of the last six weeks, selling a total of 129 million shares and earning $5.4 billion.
Bank of America shares fell more than 9 percent during Buffett’s sell-off. This year, the stock is still up around 18 percent, lagging behind the larger gains of competitors Goldman Sachs (GS), JPMorgan Chase (JPM) and Citigroup (C).
BofA shares rose more than 1 percent in Wednesday morning trading.
Berkshire has not yet commented on its motives for selling some of its Bank of America shares. With over 900 million shares valued at more than $35 billion, Berkshire remains the bank’s largest shareholder.
The recent moves are notable because Buffett has a long history with Bank of America, investing $5 billion in Bank of America in 2011 as the bank struggled with the fallout from the subprime housing crisis that triggered the 2008-09 financial crisis.
The bank relied not only on the recovery of Bank of America, but also on the new leadership of CEO Brian Moynihan, who took over the top job in 2009.
Buffett’s backing certainly helped restore market confidence in the bank, and its share price has since risen by almost 400%.
Buffett held on to Bank of America even as he began selling shares in other large lending institutions.
Between 2018 and 2022, he sold huge stakes in JPMorgan Chase (JPM), Wells Fargo (WFC) and Goldman Sachs (GS), some of them just months before the upheaval in the banking system that began in mid-March 2023.
Buffett had begun selling his Wells position after a series of scandals rocked the bank, including revelations that employees, under pressure to meet sales targets, had opened millions of accounts that customers did not want and charged fees that were not necessary.
“We are very cautious … about bank ownership, and we are sticking with one bank … I like Bank of America and I like the management,” Buffett said at Berkshire’s annual shareholder meeting in May 2023.
By June of this year, Bank of America accounted for 15% of Berkshire’s portfolio as the company reduced its stake in Apple (AAPL).
It is now the company’s third-largest position behind Apple and American Express (AXP).
David Hollerith is a senior reporter for Yahoo Finance, covering banking, cryptocurrency, and other areas of finance.
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