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One year after Warren Buffett called his multibillion-dollar bet on Bank of America Corp. an investment worth keeping, he’s selling it down.
Buffett’s Berkshire Hathaway Inc. disclosed its third disposal of shares this month — paring its massive, profitable stake in the lender by a total of more than US$3 billion.
The conglomerate, which started building an investment in the bank in 2011 and has long reigned as the top shareholder, sold US$767 million of the stock from July 25 to July 29, according to a regulatory filing Monday. That and prior sales this month reduced Berkshire’s stake by a total of 6.9 per cent.
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Still, Berkshire holds almost 962 million shares, the filing shows — worth US$39.5 billion at Monday’s closing price.
The sales mark Buffett’s biggest pullback from a bet that has long served as a prominent vote of confidence in the stewardship of Bank of America chief executive Brian Moynihan. The legendary 93-year-old investor began cashing out in mid-July, when the price was up 31 per cent this year.
The stock has since slid 6.9 per cent. It was little changed in early trading Tuesday at 8:30 a.m. in New York.
A representative for Bank of America declined to comment. Berkshire didn’t respond to messages seeking comment outside normal business hours.
Buffett initially plowed US$5 billion into Charlotte, North Carolina-based Bank of America at a dark time. The company was facing mounting legal liabilities after the 2008 financial crisis, and shareholders were growing anxious about the toll that was taking on its capital.
Buffett has said he was in the bathtub when he came up with the idea of intervening, arranging to acquire preferred stock and the right to buy common shares. His imprimatur quelled public doubts and soon sent the stock higher, creating a massive paper profit.
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Berkshire kept investing in Bank of America in the decade that followed, eventually seeking regulatory approval to amass a stake surpassing 10 per cent. Last year, as Buffett adjusted financial-industry bets and exited some, he called out Bank of America as one to keep.
“I like Brian Moynihan enormously,” he said that April. “I just don’t want to sell it.”
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