Buffett's Berkshire offloads more shares in Bank of America

Berkshire's share of cash holding has more than doubled in just two years, and are now rapidly moving towards the $300 billion mark.

Warren Buffett's Berkshire Hathaway has offloaded $760 million worth of shares in Bank of America - one of its biggest holdings - during last three sessions, regulatory filings showed on September 6.

The sale of 18.7 million BofA shares has added to Berkshire's rising cash pile, now at $277 billion, with a total of $6.97 billion coming from trimming stake in the bank since July. Even then, Berkshire remains Bank of America’s biggest shareholder with a 11% stake which is valued at $34.7 billion.

It is possible that Berkshire's stake in America's second-largest bank may slip below the 10% threshold going forward, that requires regulatory disclosures within a few days of the transaction.

Berkshire's share of cash holding has more than doubled in just two years, and are now rapidly moving towards the $300 billion mark. One of factors that could explain Buffett's sustained trimming of positions in key stocks could be that he is expecting higher corporate taxes going forward. “With present fiscal policies, I think something has to give. And I think higher taxes are quite likely,” Buffett had said during the Berkshire AGM in May 2024.

Berkshire has struggled to deploy its cash pile as deals have been hard to come by. At the annual shareholder meeting in May, Buffett had said that he was not in a a rush to spend unless the opportunity has 'very little risk and can make us a lot of money.'

Berkshire's June quarter shareholding had also revealed small stakes in cosmetics chain Ulta Beauty and aerospace company Heico.

Just recently, Berkshire Hathaway's market capitalisation crossed the $1 trillion mark, reflecting strong investor confidence behind the company. Berkshire is now in the league of only six other companies of this size, all of them Big Tech: Apple, Nvidia, Microsoft, Alphabet, Amazon and Meta Platforms.

Earlier this year, Berkshire sold more than half of its shareholding in Apple.

The sustained selling in the shares of Bank of America has prompted many market participants to explore the purpose to holding so much cash at this time in the economy, and the broad message that it may be conveying.