BofA stock dips as Berkshire Hathaway trims stake further

Shares of Bank of America (BAC) are trading lower Friday following news that Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) has further reduced its position in the bank. This latest sell-off comes after Berkshire Hathaway offloaded shares on Wednesday. The recent transactions bring the total value of Bank of America shares sold by Berkshire since mid-July to $3.8 billion.

Catalysts co-hosts Seana Smith and Madison Mills break down the details.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video transcript

Shares of Bank of America are following along with the broader markets more to point out.

But you're taking a look at losses here for Bank of America just about 4% on the headlines surrounding Bank of America specifically this morning that Warren Buffett's Berkshire Hathaway off Hathaway offloading more Bank of America shares when you take into account exactly what this ultimately means here for the stock.

It is under a tremendous amount of pressure.

Now this is something that has been occurring over the last several trading days.

And I think at this point, investors are asking what exactly it is that Berkshire maybe sees coming down the pipeline, what it is that Berkshire sees if there's any sort of shift or change, maybe uh coming along for Bank of America.

Just what is sparking this uh selling consistent selling of shares.

It is important to point out though they do remain an extremely large shareholder th Bank of America, so their stake remains large, are still betting very much on the success of Bank of America here going forward, but they have been trimming Thursday pretty steadily.

Yes, it's interesting to point out the kind of broader number here.

This is a total of $3.8 billion worth of Bank of America shares from mid July that makes it the biggest sale of the stock in its entire history and one potential driver of this, there are of course many potential reasons that impact Warren Buffett's thinking.

But one could be the broader economic cycle that we are in right now.

We just got that latest jobs report showing potentially signs of continued weakness in the economy.

We are seen in the broader bank space bank stock sliding.

You can look at the benchmark KBW bank index down over 4% today.

That's the biggest move that we've seen since May of 2023.

So potentially this is Warren Buffett and the team over at Berkshire anticipating some of the economic weakness that we have been getting and the impact that that has had on some of these banks.

And as of Thursday's close, you have Bank of America falling to the number three spot on Berkshire's list of top holdings.

Now it trails behind Apple and American Express.

I was mentioning the fact that they do remain very large shareholder there in the bank.

It remains the largest shareholder still in Bank of America with a 12.1% stake.

Yeah, it's a really interesting story to monitor just in terms of the degree of the sell off there.