Buffett DITCHES 34 Million of His BofA Shares... (Time to Panic?)

Uncle Warren, the renowned CEO of Berkshire Hathaway, has recently made waves on Wall Street by selling $1.5 billion worth of his favorite banking stock: Bank of America. 

(Source: Barrons) 

Obviously this news comes as a shock to those who love keeping tabs on the Oracle from Omaha, especially since Bank of America has been extremely generous to Buffett and his investors portfolio numbers over the years, starting with his most notable bet on BofA back in 2011 during the debt-ceiling crisis.

(Source: Business Insider) 

As the story goes, Buffett (who famously got the idea while taking a bath… yes a bath) decided to invest $5 billion, securing preferred stock and warrants to buy common shares. And although some scratched their heads at the decision, by 2017, Buffett had not only tripled his initial investment but further proved his unparalleled knack for spotting lucrative opportunities.

(Source: Giphy) 

However, fast forward to the present, specifically over the past three days, Berkshire Hathaway has offloaded approximately 34 million shares of Bank of America, reducing Berkshire’s stake in the bank to about 998 million shares, valued at an impressive $42.9 billion.

(Source: Fortune) 

What’s even more interesting is that Buffet's decision to sell comes at a time when BofA has not only experienced one heck of a surge, soaring nearly 82% since last October…

But the bank also announced, in late June, that they were increasing the quarterly dividend by 8% to further boost its attractiveness to investors. 

(Source: Bank of America) 

So naturally on the surface, the decision to trim his position at this moment is a bit odd, considering the words “increased dividend” likely causes Buffetts heart rate to pace faster than the 20 Coke’s he has a day. 

But keep in mind, Buffett is no doubt skilled in his decision making and he’s definitely no fool. So in light of most investors taking this as a negative telling for BofA, Buffett’s recent decision looks to be more of a “take profit” scenario rather than “it’s time to panic”. 

(Source: Giphy) 

However, even if that’s truly the case, market analysts are still bracing for potential fluctuations in Bank of America’s stock price going into Monday’s opening bell. Which again, makes sense considering investors often look to Buffett’s moves as signals. So understandably, this sale could trigger a wave of additional selling within BofA’s price action. Because you know, if Warren does something, we might as well do it too right? 

(Source: Giphy) 

Plus it’s worth noting that even though Berkshire has shed $1.5 billion in shares, its substantial 12.8% stake in BofA still remains. So while some investors look at this as Warren’s ditching the stock altogether, he’s not. The dude is just taking some profits to either buy some more Mcdonalds and Cokes, or make room for his next big move? Probably both tbh.

(Source: Daily Mail) 

But regardless, what he does next will definitely be worth looking out for. Buffett doesn’t do random things for no rhyme or reason… there’s a method behind the billionaire investors madness…

And only time will tell what headlines he sparks up next after freeing up his latest massive cash pile. 

(Source: LinkedIn) 

Stocks.News holds positions in Mcdonalds and The Coca-Cola Company as mentioned in the article.